res?
4. How closely does the conceptual framework fit the operational environments of AOL Time Warner and IBM?
The matrix for Porter's Competitive Strategies includes dimensions for Competitive Advantage and Competitive Scope. The classifications of Competitive Advantage are Low-Cost and Uniqueness, while the classifications for Competitive Scope are Broad and Narrow. Thus, the four quadrants reflecting competitive strategies are (1) Low-Cost Leadership (Low-Cost and Broad Scope), (2) Differentiation (Uniqueness and Broad Scope), (3) Focused differentiation (Uniqueness and Narrow Scope), and (4) Focused Low-Cost Leadership (Low-Cost and Narrow Scope.
The strategic approach followed by AOL Time Warner is Low-Cost Leadership. The company pursues a Broad Scope strategy in each of its profit-center operations, while simultaneously pursing a strategy of cost leadership in each of its profit-center operations.
In contrast with AOL Time Warner, IBM pursues a strategic approach of differentiation. Although computer and information technology products are moving toward commodity classifications, IBM uses product features and quality to support a Differentiation strategy that includes uniqueness of product features targeted at a Broad market.
When Netscape was an independent entity, the company pursued a strategic approach of Differentiation. Differentiation was feasible at that time because of the newness of Web browser software and net-server products produced by the company. In the company's present incarnation as a wholly owned subsidiary of AOL Time Warner, the Web browser market no longer lends itself to a strategic approach of Differentiation. Thus, in relation to its Web browser operations, Netscape purses a strategic approach of Low-Cost Leadership, although it is not attaining that goal. With respect to the company's workflow software, however, Netscape continues to pursue a strategic approach of Differentiatio...