Compare Contrast Porter S Generic Strategies Cost Leadership Differentiation Q34256067

Compare and contrast Porter’s generic strategies of costleadership and differentiation.

Expert Answer

Cost Leadership vs Differentiation:

1. In a cost leadership strategy, either the profits are increasedprofits by reducing costs, while charging industry-average pricesOR after reducing cost, market share is increased by chargingprices lower than industry-average, while still making a reasonableprofit on each sale because of reduced costs. In a differentiationstrategy, product is made more attractive compared to others bydeveloping products with better features, functionality,durability, support, and also brand image valued by customers.
2. Cost leadership involves winning market share by appealing tocost-conscious or price-sensitive customers. Differentiationinvolves making your products or services different from and
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