CFA Level I · CFA Level I Exam · Industry and Competitive Analysis
A company decides to serve only a narrow segment of the market, such as high-altitude outdoor gear for mountaineers, by tailoring its products and costs to that segment. This approach is best described as a:
This is a focus strategy. The company concentrates on a narrow market segment and tailors its products and cost structure to it. Broad cost leadership and broad differentiation both aim at the whole industry rather than a specific niche.
- AFocus strategyCorrect
- BBroad cost leadership strategy
- CBroad differentiation strategy
Explanation
Serving a narrow segment with tailored products is a focus strategy. The broad strategies target the whole industry rather than a particular segment.
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