Day 1-2: 

Activity 1) Complete the following Porter's generic strategies table:

https://drive.google.com/file/d/1h4EzsPFNMFGVf5zSdRyvM-Vv2cMSjBrP/view?usp=sharing 

Activity 2) Develop a Strategic Plan for a fictional company

• You will be assigned one of Porter's Generic Strategies: (cost leadership, differentiation, focus cost, focus differentiation)

• Brainstorm potential industries and then select one

• Choose a company name

• Present a plan including:

  • Description of target market and goals/objectives for market share or other performance metrics over 5 years.

  • Competitive analysis including direct competitors and their perceived strategies. Groups should identify their competitive advantages.

  • Detailed explanation of how their assigned generic strategy (cost leadership, differentiation, focus cost, focus differentiation) will be implemented. This is the core of the plan and should cite operational tactics.

  • Analysis of risks to the plan and potential responses.

  • Extra: Financial projections including estimated costs, revenues, profit margins, and how they will achieve required margins through their strategy. 

  • Other groups can ask questions

Classroom Activity: Porter’s Generic Strategies in Action

Activity Title: "Find the Strategy!"

Objective:
Students will apply Porter’s Generic Strategies to real-world businesses by identifying their strategies and justifying their choices.

Step 1: Warm-Up Discussion (10 minutes)

Ask students:

• Can you name a company that sells cheap products? How do they keep prices low?

• Can you name a company that sells expensive, high-end products? What makes them unique?

• Have you ever seen a business that only targets a specific group of people?

Write down examples on the board and categorize them as Cost Leadership, Differentiation, Cost Focus, or Differentiation Focus.

Step 2: Group Task – Business Strategy Detective (20-30 minutes)

Instructions:

1. Divide students into groups of 3-4.
   
   

2. Each group gets a set of business case cards (or they can research online)

   • Example businesses: IKEA, Tesla, Red Bull, Rolex, McDonald’s, Lush, Southwest Airlines, Ferrari, Dollar Tree, Patagonia, Aldi.

3. For each business, groups must answer:

   • Which strategy does this business use? (Cost Leadership, Differentiation, Cost Focus, Differentiation Focus)

   • How do they achieve this strategy? (Give 2-3 specific business decisions that support their strategy)

   • Who is their target market?

4. Groups present their findings to the class.
   
   

Step 3: Class Debate – "Stuck in the Middle" (15 minutes)

• Pose the question: “Can a business successfully follow more than one of Porter’s strategies at the same time?”

• Assign one side to argue "YES" (e.g., Amazon balances cost leadership and differentiation) and one side to argue "NO" (businesses must pick one).

• Let students debate using examples and business logic.

Step 4: Reflection & Application (10 minutes)

Ask students:

• If you started your own business, which strategy would you choose? Why?

• How do companies adjust their strategies when competition changes?

Extension/Alternative Activity: Business Strategy Simulation

• Give students a fictional business scenario (e.g., opening a new sportswear brand).

• They must choose one of Porter’s strategies and develop a brief business plan explaining:

  • Product pricing

  • Target market

  • Marketing strategy

  • How they will compete against bigger brands

What you should know 

By the end of this subtopic, you should be able to:

• apply Porter’s Generic Strategies in a given context (HL only) (AO2)

https://quizlet.com/pa/821929873/42-porters-generic-strategies-flash-cards/?i=4jrhob&x=1jqt 

Competitive advantage 

refers to any factor that enables a business to be more appealing to customers, such as having a unique selling point, or being able to produce goods or services better or cheaply than its rivals.

Cost leadership

is a generic strategy that aims to establish a competitive advantage by achieving the lowest operational costs in the market for a particular good or service in a broad market.

Differentiation

is a generic strategy that involves a firm making its products distinct from those of its competitors, such as through quality, functionality, packaging, or branding, in a broad/mass market.

Cost Focus

is a generic strategy that involves concentrating on being a low cost producer (cost focus) for a niche market

Differentiation focus

is a generic strategy that involves differentiation within a particular segment.

Porter's Generic strategies 

is Michael Porter's model that outlines the various ways that any business of any size and operating in any industry can gain a competitive advantage, through cost leadership, differentiation, or focus.

💡 Avoid being "stuck in the middle" – If a business tries to do both low-cost and differentiation, it risks having no competitive advantage.
💡 Choose the right strategy based on market conditions – Some industries favor cost strategies (e.g., airlines), while others favor differentiation (e.g., luxury fashion).
💡 Sustainable competitive advantage comes from either cost efficiency or product uniqueness.

4.2 Porter's Generic Strategies Case Study Questions

https://drive.google.com/file/d/1YTefbIjW_rM9Edx0yfW2g-0UsQb5BM84/view?usp=sharing 

4.2 Porter's Generic Strategies Case Study Answers

https://drive.google.com/file/d/1FlpYtOuzW7gDDRnEt0BKkc8koh1tqrdO/view?usp=sharing 

Answers

(a)  Define Porter’s generic strategies.  [2 marks]

Porter's generic strategies is a strategic management tool that outlines the ways in which any business, of any size, and operating in any industry, can gain a competitive advantage. An example is cost leadership by offering low or affordable prices.

Award [1 mark] for a limited response that shows some understanding.

Award [2 marks] for a clear and accurate definition, similar to the example above.

(b)  In the context of Lidl, outline  the meaning of a competitive advantage.  [2 marks]

A competitive advantage exists when a business gains an edge over its competitors in the industry. This can be achieved by offering lower prices, such as Lidl selling some of its products for up to 50% less than its rivals. This helps to attract more customers to shop at Lidl.

Award [1 mark] for a limited response that shows some understanding.

Award [2 marks] for a clear and accurate description, similar to the example above.

(c )    Explain two advantages and one disadvantage of a cost leadership strategy for Lidl.  [6 marks]

Advantages could include an explanation of any two of the following points:

• Lidl can price its products the same as its rival supermarkets but earn a higher profit.

• Alternatively, Lidl can lower its prices for its goods, below those charged by its rivals, thereby attracting more customers and gaining higher market share.

• Lidl, being a cost leader, is more able to withstand price wars, a common feature of the supermarket industry in many countries.

• Similarly, as a cost leader, Lidl is more able to withstand lower demand in the economy during times of a recession.

• Accept any other relevant advantage that is explained in the context of Lidl.

Possible disadvantages could include an explanation of any one of the following points:

• Lidl will need to continually innovate and create new ways to reduce costs, beyond its use of keeping fast-moving consumer goods in their original cardboard boxes.

• A cost leadership strategy can be risky as rival supermarket chains with similar market power can simply try to match Lidl's price cuts.

• Lidl could develop an unwanted reputation for low quality, due to its low prices, especially in new overeas markets.

• Lidl is dependent on a high volume of sales to generate profit, due to the relatively low profit margins, and the small number of products offered for sale in its stores.

• Accept any other relevant disadvantage that is explained in the context of Lidl.

For each point, award [1 mark] for a relevant advantage or disadvantage, and a further [1 mark] for an accurate explanation of that point, up to the total of [6 marks].