Business Thinking for Designers

Business strategies 
While a business model describes how an organization 
creates and captures value, business strategies are how an 
organization aims to do those things better than competitors. 
There are typically several viable business models within a 
market, which means it’s ultimately the strategies that will lead 
to success or failure.

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36 
Explore business concepts
To gain a competitive advantage, there are three generic 
strategies companies use:
• Become a cost leader 
• Create differentiation
• Target a niche customer base
These generic strategies were popularized by Michael Porter 
in his 1985 book, Competitive Advantage: Creating and 
Sustaining Superior Performance.
Let's look at how two companies in the same industry 
use similar models, but have vastly different strategies to 
gain a competitive advantage. Dell and Apple both use the 
disintermediation model to provide direct-to-consumer 
computer products. Dell chose the cost-leadership strategy, 
providing affordable, customized computers quickly through a 
well-oiled supply chain. 
In the same market, Apple uses differentiation by focusing on 
premium, easy-to-use products with high-quality purchasing 
experiences, world-class design, and integrated products and 
services.

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37 
Explore business concepts
While the strategies for Dell and Apple are fundamentally 
different, both companies arrive at their strategies by 
answering two basic questions: