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EXECUTIVE SUMMARY
Michael Porter's generic strategies consist of cost leadership, focus, and differentiation. The researchers sought to determine which strategies firms in Appalachia employed. A survey was conducted with 309 usable responses. Managers and owners ranked their perception of competition and whether their products or services competed on the basis of low cost, quality, or differentiation. Results are compared by gender, length of time in operation, business classification, and sales volume. Statistical differences emerged.
Keywords: Porter's generic strategies, Competition, Appalachia, Products or services
INTRODUCTION AND PURPOSE
Thirty years ago, Harvard professor Michael Porter published the now famous "How Competitive Forces Shape Strategy." In addition, he postulated the generic strategies of cost leadership, differentiation, and focus that could be used by any firm to obtain competitive advantage (Porter, 1998). Cost leadership is being the producer of a given product at the lowest cost in that industry. Wal-Mart is probably the best example of a firm using this strategy (Parnell & Lester, 2008). Differentiation is when a firm provides a product or service which is unique or perceived to be different and superior by its customers from its competition. Often firms that practice this strategy can command a premium price for their products. Lexus and BMW are examples of firms employing this strategy. Focus occurs when a firm concentrates on a particular niche segment and attempts to satisfy the demands of that group. These firms rely heavily on brand loyalty and may have lower sales volumes. Southwest Airlines, Black Entertainment Television (BET), and Family Dollar are examples of firms employing a focus strategy.
The history of Appalachia is full of challenges and heartache. To address a plethora of issues, President John F. Kennedy appointed the President's Appalachian Regional Commission. Their task was to analyze and make recommendations to address the multiplicity of problems in an area described as "a region apart-geographically and statistically" (PARC, 1964, p. 65). The next year, Congress created the ARC to allocate funds among member states to support economic and social development in the region (Jeter, 2000). Still, by 1998, the region had wages 10 percent lower than in the rest of the US, lower birth rates, the businesses were smaller and paid lower wages than did their counterparts in the rest...