CS Professional · Strategic Management and Corporate Finance · Competitive Positioning
According to Michael Porter's generic strategies, a firm that targets the whole market and aims to be the lowest-cost producer in its industry, while selling at prices near the industry average or below, is following which strategy?
This is the cost leadership strategy. The firm serves a broad market and gains advantage by having the lowest cost in the industry, using scale and cost control, which lets it price at or below average. Differentiation and focus strategies rely on uniqueness or a narrow segment instead.
- ADifferentiation strategy
- BCost leadership strategyCorrect
- CCost focus strategy
- DDifferentiation focus strategy
Explanation
Cost leadership aims at a broad market with the lowest cost position, achieved through scale, tight cost control and efficiency. Differentiation relies on unique features, and the focus strategies target a narrow segment, so those options do not fit a broad-market low-cost approach.
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