MGMT 491 Lecture Notes - Lecture 7: Cost Leadership
Document Summary
A generic strategy is a general way of positioning a firm within an industry. Four basic generic business level strategies exist: cost leadership, differentiation, focused cost leadership, and focused differentiation. A firm following a cost leadership strategy offers products or services with acceptable quality and features to a broad set of customers at a low price. Many cost leaders rely on economies of scale to achieve efficiency. A firm following a differentiation strategy attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features. Successful use of a differentiation strategy depends on not only offering unique features, but also on communicating the value of these features to potential customers. Focused cost leadership strategy requires competing based on price to target a narrow market. narrow market. Focused differentiation strategy requires offering unique features that fulfill the demands of a.
