Generic strategies and congruent organisational structures: Some suggestions

Michael Porter's four generic strategies for achieving competitive advantage can be condensed into two - low cost leadership and differentiation. David Faulkner and Cliff Bowman argue that, unlike Porter, it is false to choose between these two orientations. Only the low cost strategy with internal success criteria establishing differentiation and delivering at low cost, and thus able to achieve what the authors call 'external success criteria' of both Cheaper and Better, will gain sustainable competitive advantage. The firm's organisational structure can be adapted on a value activity basis rather than an overall business unit level to realise this proposed strategy.