Skip to content

CA Intermediate · Financial Management and Strategic Management · Strategic Choices

Rohan Foods has a strong brand but faces intense price competition in packaged snacks. It decides to offer snacks of distinctly higher quality and unique flavours, accepting higher costs and charging a premium that customers willingly pay. According to Porter's generic strategies, this is:

This is a differentiation strategy. The firm offers unique, higher-quality snacks and charges a premium that customers accept. Cost leadership seeks the lowest cost, cost focus targets a narrow segment on cost, and retrenchment is not a generic strategy, so they do not apply.

  1. ADifferentiationCorrect
  2. BCost leadership
  3. CCost focus
  4. DRetrenchment

Explanation

Offering unique, higher-quality products to a broad market at a premium price is differentiation. Cost leadership would aim at the lowest cost and price. Cost focus targets a narrow segment on cost basis, and no narrow segment is mentioned. Retrenchment is a grand strategy, not a generic strategy.

Did you get it right without looking?

One question tells you little. A timed set on Strategic Choices shows your real accuracy, how long you take and where you lose marks.

More Strategic Choices questions