Introduction

This essay aims state a critical evaluation on the paradox of markets and resources of Michael Porter and Gary Hamel and discusses organizational circumstances affect a strategic leader’s choice. Michael Porter’s has brought up many theories about company strategy and competitiveness of nations and regions (Richard, 1989). His work has been recognized and adopted by many governments, corporations and academic schools in the world. Porter's strategic system mainly consists of competitive advantage, Porter five forces analysis, strategic groups (also called strategic sets), the value chain, the generic strategies of cost leadership, product differentiation, and focus the market positioning strategies of variety based, needs based, and access based market positions, global strategy, Porter's clusters of competence for regional economic development, diamond model and Porter's four corners model (Porter, 1997). Gary Hamnel is an expert in America. He has founded Strategos, a company providing management consulting based in Chicago. He has created many business strategies which are being used and learned by many companies. This essay demonstrates excellent aspects of the two persons while it also shows the author’s critical thinking on these theories. Also it will discuss organizational circumstances which affect a strategic leader’s choice such as features of environment and habitual reaction pattern.

A critical evaluation on the paradox of markets and resources of Michael Porter

Differentiation strategy includes innovation strategy

Differentiation strategy and innovation strategy in competitive advantage are both brought up in Porter's strategic system. The purpose of differentiation strategy is to stand out from the competitors by providing different products and services. The purpose of innovation strategy is to provide creative product and services (Porter, 1997). Actually, different strategy can be realized by innovation strategy. A company without innovation ability lacks competitiveness, therefore it can not different itself from other companies. Under the background of globalization and informatization, science and technology are kept updating almost every second. Companies are easily get sifted out. If a company provides innovative product and service to customers, it will definitely stand out from other companies. Therefore, differentiation strategy can be realized through innovation strategy.