CA Inter P6 · Chapter 12 · Question 3 of 10
According to Michael Porter's generic strategies, a firm that produces standardised products at a very low per-unit cost for price-sensitive buyers across a broad market is following:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Cost leadership strategy
Explanation
Cost leadership aims at the broad mass market and emphasises producing standardised products at a very low per-unit cost for price-sensitive consumers, through economies of scale, efficiency and tight cost control. Differentiation targets price-insensitive buyers with unique products, focus strategies serve a narrow segment, and best-cost provider combines low cost with upscale features.
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