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IAI Actuarial Core Principles · Business Management · Mission, business strategy, teamwork and time management

Rudra Health Insurance wants to be seen by customers as the lowest-cost provider of basic health cover across India, achieving this through standardised products, heavy automation and tight expense control. According to Porter's generic strategies, which is it pursuing?

Rudra is pursuing cost leadership. Porter's cost leadership aims to be the lowest-cost provider across a broad market through standardisation, automation and expense control. Differentiation relies on unique features, focus targets a narrow segment, and vertical integration is not one of the generic strategies.

  1. ADifferentiation
  2. BFocus on a niche with differentiation
  3. CCost leadershipCorrect
  4. DStuck in the middle
  5. Vertical integration

Explanation

Porter's generic strategies are cost leadership, differentiation and focus. Competing broadly on lowest cost via standardisation and efficiency is cost leadership. Differentiation relies on unique features, and focus targets a narrow segment. Vertical integration is a direction of growth, not a generic strategy.

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