CS Professional · Strategic Management and Corporate Finance · Competitive Positioning
A packaged-foods company in India aims to be the lowest-cost producer in the whole market by building large plants, tightly controlling overheads and pursuing scale economies, then selling standard products at competitive prices. Which of Porter's generic strategies is it following?
The company is following cost leadership. It targets the whole market, builds scale, controls overheads and sells standard products at competitive prices, so its advantage rests on being the lowest-cost producer rather than on uniqueness or a narrow segment.
- ACost leadershipCorrect
- BDifferentiation
- CFocus with differentiation
- DStuck in the middle
Explanation
Cost leadership aims at the lowest cost across a broad market through scale, tight overhead control and efficiency. The firm sells standard products, so it is not building unique features for a premium. Focus would require a narrow segment, which is absent here.
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