ACCA Applied Knowledge · Business and Technology · Competitive factors
Zenith Bags makes handcrafted leather bags with distinctive designs and sells them only to luxury buyers in a few high-end boutiques, charging premium prices. Which generic strategy is Zenith following?
Zenith follows differentiation focus. It offers distinctive, premium-priced products, which is differentiation, and sells only to a narrow luxury segment through a few boutiques, which is focus. It is not seeking lowest cost and is not serving a broad market.
- ACost leadership
- BDifferentiation focusCorrect
- CCost focus
- DDifferentiation across a broad market
Explanation
Zenith offers a unique, premium product (differentiation) to a narrow luxury segment (focus), which is differentiation focus. Cost focus would require competing on low cost in a narrow segment, which does not fit premium pricing.
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