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CMA Intermediate · Operations Management and Strategic Management · Strategic Analysis and Strategic Planning

Kaveri Silks designs handloom sarees only for luxury bridal buyers in metropolitan cities and charges premium prices for exclusive designs. Which generic strategy best describes this approach?

This is a focus strategy based on differentiation. Kaveri Silks serves a narrow segment, luxury bridal buyers, and competes through exclusive designs commanding premium prices. Broad differentiation would target the whole market, and cost leadership would stress low price, neither of which applies.

  1. AOverall cost leadership
  2. BBroad differentiation
  3. CFocus with differentiationCorrect
  4. DDiversification into unrelated business

Explanation

The firm targets a narrow segment (luxury bridal buyers) and competes through unique designs and premium pricing. Narrow target plus uniqueness is the differentiation focus strategy. Broad differentiation would serve a wide market, which is not the case here.

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