A business owner states: 'Our strategy is to be the cheapest supplier in the whole market for standard goods.' Which generic strategy is this?
Answer and explanation
Correct answer: A. Cost leadership
- Step 1: Lowest cost across a broad market is cost leadership.
- Step 2: It needs efficiency and economies of scale.
Answer
Cost leadership.
Why not the others: Differentiation: This strategy focuses on unique features that justify a higher price. Differentiation focus: This strategy targets a narrow segment with a unique offer. Market penetration: This is a growth strategy based on selling more of existing products in existing markets.
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