Strategic Marketing: Planning and Control, Third Edition

the organisation being stuck in the ‘middle-of-the-road’ – either low cost,
differentiated or focused (Figure 8.3).

Strategy formulation 155

Cost

leadership Differentiate

Stuck in

the

middle

Focus

Figure 8.3

Inconsistent strategy

Illustrative Example 8.1

SimplyOrg@nic Food Company Ltd: A niche ‘e-tailer’

The food retailing business is highly competitive, with large supermarket chains (e.g. Tesco)

dominating the market place. However, potential exists for specialist retailers. The

SimplyOrg@nic Food Company stocks a range of over 1500 organic products. These include

fruit and vegetables, meat, fish, wine and beer, groceries, dairy and infant products. Telephone

and Internet home shopping allows easy ordering, with products delivered to UK customers

before noon, on a day of their choice. The company has recently expanded its organic range to

cover non-food products – gifts, fabrics and home care items.

While the large supermarket chains offer a range of organic goods, they operate on broad

retail bases as opposed to SimplyOrg@nic’s specific focus. As a home shopping ‘e-tailer’ – a

dot.com company selling to the general public – focusing on organic goods, the potential exists

to create and sustain competitive advantage.

Porter’s concept of competitive advantage advocates pursuing one generic
strategy and thus avoiding a low profit ‘stuck-in-the-middle’ position.
Alternative views exist. The adoption of common production, quality,
marketing and management philosophies by industry competitors may
mean that effective differentiation or absolute cost leadership is rarely
achieved. Additionally, what managers aren’t concerned with controlling
costs? Therefore differentiation strategies need a cost focus. It is also pos-
sible to follow ‘hybrid strategies’ aiming to offer added value and lower