Question

Can a firm pursue cost leadership and product differentiation at the same time?

a) Yes, it's a common strategy called hybrid strategy
b) No, they are mutually exclusive strategies
c) Only if they have unlimited resources
d) Only if the industry is in decline

Answer 1

Yes, a firm can pursue cost leadership and product differentiation at the same time by implementing a hybrid strategy. This allows the firm to offer competitive prices while still providing added value through unique and differentiated products or services.

Step-by-step explanation:

Yes, a firm can pursue cost leadership and product differentiation at the same time. This is known as a hybrid strategy. While cost leadership and product differentiation are typically seen as mutually exclusive strategies, some firms successfully combine elements of both to gain a competitive advantage.

For example, a firm may focus on reducing costs through efficient operations and supply chain management, while also offering unique and differentiated products or services to attract customers. This allows the firm to offer competitive prices while still providing added value to customers through differentiating factors such as design, features, or customer experience.

However, implementing a hybrid strategy requires careful planning and resource allocation. It may also require a strong organizational culture and flexible business processes to accommodate both cost-focused and differentiation-focused activities.