Differentiation or Cost Leadership

Topics: Marketing, Porter generic strategies, Product differentiation Pages: 1 (261 words) Published: March 25, 2013
The textbook suggests that there are only two generic strategies available to a firm: differentiation or cost leadership. Both strategies can be applied either into a focused market or a broad market. Do you agree that these are the only two strategies available? Are they mutually exclusive? Why or why not? Porter's Generic Strategies

Target ScopeAdvantageAdvantage
Low CostProduct Uniqueness
Broad(Industry Wide)Cost Leadership StrategyDifferentiation Strategies Narrow (Market Segment)Focus Strategy(low cost)Focus Strategy(differentiation)

Generally ,as per the Porter's Generic Strategies there are only two strategies are available to the firm i.e., differentiation and cost leadership. These strategies are the strength of the market which is independent of the product and industry. Along with these two strategies the focus strategy is also there which is the combination of low cost and differentiation strategy. The Focus strategy help firms to provide the unique good quality product with the low cost that focus on the Narrow Market segments. Advantage with the Focus Strategy is that it helps the both customer and organization side. Customers fulfil their needs within their budget and organization also gain its profits but the implementation of the Focus Strategy is very risky which required more studies of the market and about competitors. As per my aspects Focus strategy really helps the organization to able to produce the good quality of product within the customer budgets which also focus on the market demand. Daft, R. L. (2010). Management (9th ed.). Mason, OH: South-Western Cengage Learning. ISBN: 13-9780324595840 Ref: Porter's Generic Strategies
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