"In coping with the five competitive forces, there are three potentially successful generic strategic approaches to outperforming other firms in an industry: (Porter, 1980, p. 35)"

Overall Cost Leadership

    "The first strategy, … is to achieve overall cost leadership in an industry through a set of functional policies aimed at this objective. Cost leadership requires aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force, advertising, and so on. A great deal of managerial attention to cost control is necessary to achieve these aims. Los cost relative to competitors becomes the theme running through the entire strategy, though quality, service, and other areas cannot be ignored. (Porter, 1980, p. 35)"

Differentiation

    "The second generic strategy is one of differentiating the product or service offering of the firm, creating something that is perceived industrywide as being unique. Approaches to differentiating can take many forms: design or brand image (…Mercedes in automobiles); technology (Hyster in lift trucks…); features (Jenn-Aire in electric ranges); customer service (Crown Cork and Seal in metal cans); dealer network (Caterpillar Tractor in construction equipment), or other dimensions. … It should be stressed that the differentiation strategy does not allow the firm to ignore costs, but rather they are not the primary target. (Porter, 1980, p. 37)"

    "Achieving differentiation may sometimes preclude gaining a high market share. It often requires a perception of exclusivity, which is incompatible with high market share. More commonly, however, achieving differentiation will imply a trade-off with cost position if the activities required in creating it are inherently costly …. (Porter, 1980, p. 38).

Focus

    "The final generic strategy is focusing on a particular buyer group, segment of the product line, or geographic market …. Although the low cost and differentiation strategies are aimed at achieving their objectives industrywide, the entire focus strategy is built around serving a particular target very well, and each functional policy is developed with this in mind. The strategy rests on the premise that the firm is thus able to serve its narrow strategic target more effectively or efficiently than competitors who are competing more broadly. (Porter, 1980, p. 38)"

Reference:

Porter, Michael E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free Press.