Advanced The concept of Generic Strategies was established by Professor Michael Porter during the 1980s. He stated that a company must choose one of these strategies in order to compete and gain sustainable competitive advantage. In addition to assessing the for a more detailed description of their work you should refer to the book they have written on the balance scorecard - The Balance Scorecard: Trans¬ lating Strategy into Action (1996b). For a broader description of performance measurement linked to strategy you should refer to Simons (1999).

Therefore some questions are included that do not relate directly to the chapter content. However, where questions are set on performance measure¬ ment you should try and adopt a balanced score- card approach by emphasizing the need to integrate financial and non-financial measures and link performance measurement to an organization’s strategies.

source of competitive advantage. Porter also explained that it was necessary to identify the target for the organisation’s products or services. This involved distinguishing between whether the target was broad and covered the majority of the overall market, or narrow and concentrated on a small but profitable part of it.

Requirements:

(a) Critically appraise the value of Porter’s Generic Strategy model for strategic planning purposes. (12 marks)

(b) Explain how the theoretical principles of the Experience Curve may be applied to deter¬ mine a generic strategy for a company.

(8 marks) (Total 20 marks)

CIMA Stage 4 Strategic Management Accountancy and Marketing