CS Professional · Strategic Management and Corporate Finance · Competitive Positioning
A packaged-foods company in Pune makes a regional snack with a distinctive recipe and sells only to health-conscious urban consumers in two cities, charging higher prices. According to Porter's generic strategies, which strategy is it following?
The company follows differentiation focus. It serves a narrow buyer segment and competes on a distinctive product that commands higher prices, not on low cost. Broad differentiation would target the whole market, so it does not fit.
- ACost leadership
- BBroad differentiation
- CDifferentiation focusCorrect
- DCost focus
Explanation
The firm targets a narrow segment (health-conscious consumers in two cities), so it is a focus strategy. It competes through uniqueness and premium pricing rather than low cost, making it differentiation focus. Broad differentiation would address the whole market.
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