Official skill · Strategy

Generic strategy choice

v1.0.0 · Updated 4 November 2026

Chooses one of Porter's generic strategies on evidence, checks the stuck-in-the-middle risk, and writes the trade-offs the choice forces. Use it when deciding how to compete against bigger or cheaper rivals.

Works in Claude, ChatGPT, and coding agents. On Team and Business, the official skill in your pod updates itself when we improve it.

When to use it

• Deciding how to compete against bigger or cheaper rivals
• The team is split between cutting prices and adding features or service
• The company is trying to serve everyone

What you give it

• Rivals and how each competes
• Your cost position with evidence
• What customers value and pay more for
• Segments, their size, and where you win

What you get

A two-by-two of options with evidence, one chosen strategy, a stuck-in-the-middle check, the trade-offs it forces, the activities that must fit, risks, and first moves.

How it works

1. Map the options on two axes Advantage type (lower cost or differentiation) by competitive scope (broad market or a narrow segment). Write what each of the four positions would mean for this company in one line: what it would sell, to whom, at what price level.
2. Test cost leadership honestly A cost leader must be the lowest-cost producer, not one of several cheap ones, while keeping quality buyers accept. Ask for evidence of a cost lead in scale, process, inputs, or location. If a rival is larger or already cheapest and the company has no structural cost edge, say this option is weak.
3. Test differentiation Name the attributes buyers value that rivals don't deliver, and the evidence that buyers pay more for them. A premium only counts if it exceeds the extra cost of being different. Mark any attribute without customer evidence "[check: customer evidence]".
4. Test focus Identify segments whose needs, or cost to serve, differ from the broad market enough that broad rivals serve them poorly. Cost focus wins where a segment can be served more cheaply with a tailored setup; differentiation focus wins where a segment has needs others ignore. Check that the segment is large enough to support the business, or mark it "[check: segment size]".
5. Choose one, and check for the stuck-in-the-middle risk Pick the position with the strongest evidence. If the plan claims both lowest cost and a broad premium, ask what makes that possible (a new technology, a rival's mistake); Porter's view is that a company trying to be all things to all customers can end up with neither advantage. Say plainly when the company is in the middle today.
6. Write the trade-offs Name what the company will stop doing or refuse: customers it won't serve, features it won't build, service levels it won't match, channels it won't use. A choice that gives up nothing is not a choice. Separate these from operational improvements the company should make anyway, which rivals can copy.
7. List the activities that must fit the choice For 4 to 6 activities (pricing, product range, sales, service, operations, hiring), write how each changes so it supports the chosen position and the others. Point to value-chain-analysis for a fuller map.
8. End with the decision, the risks, and the first moves Give the chosen strategy in one sentence, 2 to 3 risks with an early warning sign each, and the first 3 actions with owners if the user named them.

The SKILL.md

The whole file, as your AI reads it. Download it

---
name: generic-strategy-choice
description: Helps a business choose one of Porter's generic strategies - cost leadership, differentiation, cost focus, or differentiation focus - from its facts, tests whether it can actually win on that basis, flags the stuck-in-the-middle risk, and writes the trade-offs the choice forces, meaning what the company will stop doing, which customers it won't serve, and which activities must change to fit. Use when someone asks which generic strategy fits, cost leadership vs differentiation, whether to be the cheapest or the best, whether to focus on a niche, how to compete against bigger rivals, or says the company is trying to be everything to everyone.
---

# Generic strategy choice

A company earns above-average returns in two basic ways: it has lower costs than rivals, or it offers something buyers value enough to pay a higher price for. It also chooses how wide a market to serve: the broad industry or a narrow segment. Crossing those two choices gives Porter's generic strategies: cost leadership, differentiation, and focus, where focus comes in two forms, cost focus and differentiation focus. Michael E. Porter introduced generic strategies in Competitive Strategy (1980) and developed them in Competitive Advantage (1985). His later article "What Is Strategy?" (HBR, 1996) adds the test this skill leans on: a real strategy forces trade-offs, and running the same activities better than rivals (operational effectiveness) is not a strategy by itself.

## When to use

- A company is deciding how to compete against larger or cheaper rivals.
- The team can't agree whether to cut prices or add features and service.
- Considering a niche, a new segment, or a premium line.
- Sales, marketing, and product are pulling in different directions and the company risks being everything to everyone.
- Not for judging how profitable the whole industry is (use five-forces-analysis first), and not for mapping your own costs and value activity by activity (use value-chain-analysis).

## What you need

- The market and the main rivals, with how each competes (price level, what they're known for, who they serve).
- The company's cost position compared with rivals, with evidence: unit cost, scale, input prices. If unknown, mark "[check: unit cost versus rivals]"; never assume a cost advantage.
- What customers say they value and would pay more for, from sales notes, reviews, win-loss records, or interviews.
- The customer segments, their size, and which ones the company wins today.
- Current pricing and margins if available.
- If the user has a preferred strategy, note it, then test it like the others.

## Steps

1. **Map the options on two axes.** Advantage type (lower cost or differentiation) by competitive scope (broad market or a narrow segment). Write what each of the four positions would mean for this company in one line: what it would sell, to whom, at what price level.
2. **Test cost leadership honestly.** A cost leader must be the lowest-cost producer, not one of several cheap ones, while keeping quality buyers accept. Ask for evidence of a cost lead in scale, process, inputs, or location. If a rival is larger or already cheapest and the company has no structural cost edge, say this option is weak.
3. **Test differentiation.** Name the attributes buyers value that rivals don't deliver, and the evidence that buyers pay more for them. A premium only counts if it exceeds the extra cost of being different. Mark any attribute without customer evidence "[check: customer evidence]".
4. **Test focus.** Identify segments whose needs, or cost to serve, differ from the broad market enough that broad rivals serve them poorly. Cost focus wins where a segment can be served more cheaply with a tailored setup; differentiation focus wins where a segment has needs others ignore. Check that the segment is large enough to support the business, or mark it "[check: segment size]".
5. **Choose one, and check for the stuck-in-the-middle risk.** Pick the position with the strongest evidence. If the plan claims both lowest cost and a broad premium, ask what makes that possible (a new technology, a rival's mistake); Porter's view is that a company trying to be all things to all customers can end up with neither advantage. Say plainly when the company is in the middle today.
6. **Write the trade-offs.** Name what the company will stop doing or refuse: customers it won't serve, features it won't build, service levels it won't match, channels it won't use. A choice that gives up nothing is not a choice. Separate these from operational improvements the company should make anyway, which rivals can copy.
7. **List the activities that must fit the choice.** For 4 to 6 activities (pricing, product range, sales, service, operations, hiring), write how each changes so it supports the chosen position and the others. Point to value-chain-analysis for a fuller map.
8. **End with the decision, the risks, and the first moves.** Give the chosen strategy in one sentence, 2 to 3 risks with an early warning sign each, and the first 3 actions with owners if the user named them.

## Output format

```markdown
# Generic strategy: [company], [market]
**Prepared for:** [name or team] · **Date:** [date]

## Options
| | Broad market | Narrow segment: [segment] |
|---|---|---|
| Lower cost | Cost leadership: [what it would mean] | Cost focus: [what it would mean] |
| Differentiation | Differentiation: [what it would mean] | Differentiation focus: [what it would mean] |

## Evidence for each
| Option | Evidence for | Evidence against | Verdict |
|---|---|---|---|

## Choice
[One sentence: the strategy, the target customers, and the basis of advantage.]
[Stuck-in-the-middle check: where the company is today and why this choice avoids it.]

## Trade-offs this choice forces
- We stop / won't: [item]
- Operational improvements to make anyway (not strategy): [item]

## Activities that must fit
| Activity | Today | Change to fit the choice |
|---|---|---|

## Risks
| Risk | Early warning sign |
|---|---|

## First moves
1. [Action] ([owner], [date])
```

## Example

**Input:** "We're Mori Print, an online print shop in Japan, 18 staff. The big online printers sell business cards and flyers cheaper than us; their unit costs are lower, we can't match their volume. Local print shops are slower but give face-to-face help. Our orders: 40% are flyers and cards from small firms (price shoppers, low repeat), 35% are event organizers (conferences, school festivals) who need banners and signage delivered by a fixed date, often within 4 days, and who reorder each year. 25% is mixed. Event organizers often mention our phone check of their files before printing; reviews say we 'never miss a date'. Event orders have a 38% gross margin vs 21% for flyers. We also just started a cheap flyer campaign to win volume."

**Output:**

```markdown
# Generic strategy: Mori Print, online printing in Japan
**Prepared for:** Mori Print leadership · **Date:** [date]

## Options
| | Broad market | Narrow segment: event organizers |
|---|---|---|
| Lower cost | Cost leadership: cheapest cards and flyers for everyone | Cost focus: lowest-cost event signage |
| Differentiation | Differentiation: premium quality and service across all print | Differentiation focus: guaranteed-date event signage with file checks |

## Evidence for each
| Option | Evidence for | Evidence against | Verdict |
|---|---|---|---|
| Cost leadership | None | Large online printers have lower unit costs and more volume | Weak |
| Differentiation | Reviews praise reliability | Broad buyers of flyers shop on price; low repeat | Weak |
| Cost focus | None given | No sign Mori is cheaper at signage [check: signage unit cost versus rivals] | Unproven |
| Differentiation focus | 35% of orders, yearly reorders, 38% gross margin, file checks and on-time record cited by customers | Segment size outside current customers unknown [check: number of event organizers reachable] | Strongest |

## Choice
Differentiation focus: be the printer event organizers trust to deliver signage right and on the date, priced above the large online printers.
Stuck-in-the-middle check: today Mori is in the middle, competing on price for flyers (where it has no cost lead) while earning its margin on reliability for events. The new cheap flyer campaign pulls further toward a cost race it can't win.

## Trade-offs this choice forces
- We stop the cheap flyer campaign and stop matching the large printers' flyer prices.
- We won't compete for one-off, price-only orders; they get standard prices and standard lead times.
- We keep the human file check even though it costs staff time, and we don't automate it away to cut price.
- Operational improvements to make anyway (not strategy): faster file upload, clearer order tracking.

## Activities that must fit
| Activity | Today | Change to fit the choice |
|---|---|---|
| Pricing | Flyer discounts | Price event orders by delivery date; no flyer discounting |
| Sales | Cheap flyer campaign | Reach event organizers before the season; yearly reorder reminders |
| Production scheduling | [check: current practice] | Reserve capacity for dated event orders |
| Service | Phone file check [check: current practice: every order or on request] | File check standard on every event order |
| Product range | Flyers, cards, banners, signage [check: current practice] | Add event items (banners, stands, name badges) [check: equipment needed] |

## Risks
| Risk | Early warning sign |
|---|---|
| Event segment too small to replace lost flyer volume | Event revenue growth slower than flyer decline for two quarters |
| A large printer adds a date guarantee | Event customers quoting a rival's guarantee |

## First moves
1. End the cheap flyer campaign this month (marketing lead).
2. Count reachable event organizers and their yearly print spend [check: data source] (sales lead).
3. Publish a delivery-date guarantee for event orders (operations lead).
```

## Checks before you send

- [ ] All four positions were considered, and each verdict rests on evidence from the input or a "[check: ...]".
- [ ] Cost leadership was rejected or accepted on evidence of a cost lead, never assumed.
- [ ] The choice is one position, in one sentence, with the target customers named.
- [ ] The stuck-in-the-middle check says where the company is today.
- [ ] The trade-offs list things the company will stop or refuse, separate from operational improvements.
- [ ] It ends with risks, warning signs, and first moves, not a description of the framework.

## Common mistakes

- Calling a company a cost leader because it is cheap. Low price without the lowest cost is a margin problem.
- Calling "quality" or "great service" a differentiation without evidence that buyers pay more for it.
- Picking a focus segment that is a slice of demand but not a distinct set of needs or costs, so broad rivals serve it just as well.
- Listing operational improvements (faster, cheaper, fewer errors) as the strategy. Rivals copy these.
- Choosing a position and keeping every old customer, product, and promotion. The trade-offs are the choice.

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Changelog

• v1.0.0 · 4 November 2026 · First release.