ACCA Applied Knowledge · Business and Technology · Competitive factors
A small firm makes hand-crafted leather saddles only for professional competitive horse riders and charges premium prices for its specialist features. Which generic strategy does this describe?
This is differentiation focus. The firm serves a narrow niche of professional riders and competes through specialist, unique features that justify premium prices. Cost focus would mean competing on low cost in a niche, and cost leadership aims at a broad market.
- ADifferentiation focusCorrect
- BCost leadership
- CCost focus
Explanation
The firm serves a narrow segment (professional riders) and competes on unique features, supporting premium prices. That is differentiation focus. Cost focus would compete on low cost within a niche, and cost leadership applies across a broad market.
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