We learned Porter’s generic strategies in class 7.Are the strategies suitable for every firm?How to decide which one to operate?Recently,Air France announced it plans to build its low cost airline ,which is strongly opposed by the pilots.Because the company fails to pay the same salaries to pilots who work in the new airline.In this case,Air France intends to impose a cost leadership strategy but it is not a wise choice.

Pilots insist they won’t take lower pay to work for a new Air France budget airline

Choosing any strategy is risky ,so the company has to do positioning before they make a decision.In terms of a low cost strategy,access to capital and resources is necessary as well as the efficiency of production.Obviously,Air France did not give careful consideration ,which leads  its incapability of coping with its striking employees and providing the same contract to every pilot. In my opinion,cost leadership strategy is actually even more tricky than differentiation strategy.Because the company who chooses to differentiate can focus on  innovation and technology in order to attract customers,it seems more technical and the purpose is much clearer.While firms who wants to cut prices to profit more has more things to consider like its capacity,pricing and the competition is more fierce because their competitors can make a low price as well.Therefore, how to have an absolute advantage in prices without lossing will be a big question for those companies.