How does lowcost leadership differ from a differentiation st

How does low-cost leadership differ from a differentiation strategy and a focus strategy? Discuss in detail.

Solution

Michael Porter has developed theories based on business strategy, economics and other causes and is considered as the Father of Corporate strategy and management.

The three bases of strategic positioning are: -

The advantage of cost strategy is that the products will be available at lower cost which can help in earning more profits. Disadvantage of cost strategy is that the quality of products and services might get compromised.

The advantage of differentiation strategy is that it helps in creating value for the brand and product uniqueness. The disadvantages of differentiation strategy are the products will be costly, requires lots of research work and might affect the profits because of the competitors.

The advantages of focus strategy are that it helps in building great customer loyalty, requires minimal resources and helps in entering the new market easily. The disadvantages of focus strategy are the growth opportunities are very less, the target audience might change and lots of competition.