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BMGT 495- Week 3 Discussion: Porter’s Competitive Advantage Model

Aug 29, 2023

  1. Explain, using the link provided to Porter’s Competitive Advantage Model, how Porter’s Competitive Advantage model applies to the Smithfield’s Board of Directors issue of deciding to produce a very exclusive furniture line or a mass-produced, mass-marketed furniture product line. Use in-text citations as appropriate.
  2. Select the best strategy for the Smithfield Company to pursue from the two strategies Porter presents in his model and explain why that particular strategy is better than the alternative.   
  3. Using this week’s course readings, assuming Joan Smithfield accepts your recommendation, what is the next action she should take to determine if your recommendation is correct? Be specific. Use in-text citations and list references from course readings as required

Week 3 Discussion: Porter’s Competitive Advantage Model

A: PORTER’s competitive model majorly highlights the three strategies which include

Low price leadership strategy: The company, Smithfield Custom Furniture pursuing a low-cost strategy and aspires to become the industry leader in supplying low-cost furniture items to its clients. Moreover, the company aims to manufacture furniture goods and related services for its clients at a comparatively low cost than its clients. As a result, it will appeal to the clients and customers who are looking to buy the products in bulk and the company may get good profit and sales volume (Course lumen, 2022). Meanwhile, if the company wants this strategy to be successful, then it needs to stand out amongst the company’s leaders i.e. Walmart and Costco. On the other hand, IKEA is also a low-cost leader in the industry with a target of low-cost strategy which many clients find attractive.

Differentiation leadership strategy: This strategy is best and recommendable for the goods and services that have distinct attributes and high value for the targeted clients. Therefore, the customer needs to have a firm belief that the product has a superior quality over their competitors and hence the product is worth every penny. Product differentiation can be based on features, quality, customer service, and various other factors. It also includes marketing campaigns as one of the strategies to differentiate a product and build an emotional attachment to it. If talk about real-life companies, then Apple and Sony are in the broad market scope and seek a differentiated strategy.

Integration strategy: In this competitive market, the customers demand distinction and cheap-cost products. Many companies have achieved this by forming a comprehensive strategy. Porter’s model indicates that this integration strategy might fail, however, other scholars have provided real-world evidence about this strategy too which later changed Porter’s mind. Many automobile companies that tend to produce luxury brands such as KIA K900, have followed the integration strategy (Course lumen, 2022). The company had kept the cost of the product down used various components from its low-cost vehicles and defined a luxury car.

B: The Smithfield company can utilize the Strategic objective and analysis strategy for its company operation. It is because the strategic objective and analysis is the first stage that helps in building the vision, mission, and value statement for the organization (Course lumen, 2022). It is done in conjunction with the PESTLE (external analysis of the business environment) and SWOT (internal analysis of the business environment). Moreover, the value statement of the organization might change because the new information is now available to the business which might impact the ability of the company to operate in the external environment of the industry.

C: CEO Joan Smith might take action based on the world of business and commerce perspective. The current business era requires a different business strategy for competing with the online giants which might slow down the competition between them. Therefore, those companies who thought that they were immune to the internet competition are now finding that the same online platforms are eating their whole profits. Now customers rarely fill in their whole addresses and information to generate the invoice because mobile devices and already saved that information (Chapter 4: Managing firm resources). On the other hand, many patients are now consulting with their doctors through online modes. Hence businesses that are running on digital platforms without any physical location are now referred to as e-businesses. It is adopted by many organizations nowadays no matter how big or small it is. Therefore, it is predicted that Smithfield Furniture Company might use the e-business strategy to gain more insights and potential customers.


Course lumen (2022). Stages and Types of Strategy. Retrieved on 4th October 2022, from:

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