ACCA Applied Knowledge · Business and Technology · Competitive factors
According to Porter, a firm that aims to be the lowest-cost producer in an industry and sells a standard product to a broad market is following which generic strategy?
This is cost leadership. The firm seeks to be the lowest-cost producer and sells a standard product across a broad market. Cost focus would apply only if the firm targeted a narrow market segment, and differentiation relies on uniqueness rather than low cost.
- ACost leadershipCorrect
- BDifferentiation
- CCost focus
- DDifferentiation focus
Explanation
Porter's cost leadership strategy seeks the lowest cost across a broad market, usually selling standard products. Cost focus is the same aim but aimed at a narrow segment, so it does not fit a broad market.
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