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CMA Intermediate · Operations Management and Strategic Management · Introduction to Strategic Management

The head of a cement company's eastern-region SBU chooses to compete on cost leadership against rivals in that market by standardising products and tightly controlling costs. This choice is best classified as which level of strategy?

This is business-level strategy, since it concerns how a single SBU competes in its specific market, here by pursuing cost leadership. Corporate strategy would decide which businesses the group holds, and functional strategy would deal with how departments such as production or marketing support this choice.

  1. ACorporate-level strategy
  2. BBusiness-level strategyCorrect
  3. CFunctional-level strategy
  4. DEnterprise-level mission statement

Explanation

Choosing how to compete in a particular product-market, such as through cost leadership or differentiation, is the essence of business-level (competitive) strategy. Corporate strategy would concern which businesses to hold. Functional strategy concerns how a department supports the business strategy.

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