Question

88 A business employing a focus-low-cost strategy must emphasize product differences appropriate to a market niche.

Select one: True False

89 Scholars agree that low-cost and differentiation strategies can be combined in most cases.

Select one: True False

Answer 1

88. The correct answer is true.

Cost leadership is nothing but following the cheapest pricing strategy for its products which can compete on the price with other companies. These companies focus on mass market and earn higher profit. Cost focus firms are those whose lower cost strategy that focus on narrow target market and offer products at lower cost compared to the competitors.

89. The correct answer is true.

Porter generic strategy consists of cost leadership, differentiation and focus. A company may choose one or all the strategy based on its products, customers, market segment, price, quality etc. Choosing one strategy will be simple and profitable in the short run. However choosing multiple strategies may be complex and profitable in the long run.