HR STRATEGY

According to Michael Porter’s theory of 1980 a company for the sake of competitive advantage may apply two types of generic strategy. That is cost and differentiation strategy that is implemented under the human resource strategy within a competitive company. As a cost generic strategy, the company may embark on cost leadership strategy whereby the main focus is to sell their products at an average industry price or below average of the industry price so that they can gain more profit compared to their rivals in the markets. To gain cost advantage, the human resource through proper planning, training and staffing process should gain unique access to lower cost materials, improve the process efficiency as well as avoid certain cost within the company hence making products of the lower price. Lower cost focuses on high level of expertise as well as efficient distribution process that avoids wastage of materials leading to manufacturing of products that are of lower price

On the other hand, differentiation strategy focuses on the manufacture of products as well as services with unique attributes that attract larger group of customers. Due to the unique attributes, the customers will perceive the products of this company to be better than those products or services produced by the competitor company. The company that employs differentiation strategy believe that the extra cost incurred including the unique attributes of the products or services will be covered by the higher price of the products. To exercise differentiation strategy, the human resource management must understand that the customers have specific needs which are not completely meet and at the same time the company has specific materials and resource that it can use to meet the specific demands. In addition, the company has to work on gaining loyalty of consumer by meeting their specific needs to compete favorably in a comparative market

 

Reference

Wallace, C. M., Eagleson, G., & Waldersee, R. (2000). The sacrificial HR strategy in call centers. International Journal of Service Industry Management11(2), 174-184.

Friis, M. (2012). Generic strategies in emerging market start-ups-A case study in the solid state lighting industry.

 

 

 

 

 

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