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In: Operations Management

Compare and contrast a low-cost generic strategy with a differentiation generic strategy. Use examples from the...

Compare and contrast a low-cost generic strategy with a differentiation generic strategy. Use examples from the airlines or manufacturing industries to highlight the trade-offs that need to be made in order to achieve a sustainable advantages.

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Answer:

Low-cost generic strategy: This is defined as the strategy which is based on the low cost option and it is common for all can be applied in most for the business cases.

The strategy which drives the low cost approach as a generic module for the business product or service in the consumer market. Based on the low cost generic strategy, the product or services are placed in the market on low cost approach so that they can have good consumer influence and can have large sale for the business.

Differentiation generic strategy: Differentiation generic strategy is defined as the strategy of the form adapted to explore generic differentiation approach in the products or services, so that they can have multiple options in front of consumers/customers for business growth. The generic differentiation strategy allows the usage of multiple products or services by the firm for their success in the market and business growth.

Following are the examples from the airlines or manufacturing industries to highlight the trade-offs that need to be made in order to achieve a sustainable advantages

Generic Differentiation strategy –

Airline offers two mode of tickets for the customers – economy class and business class. Thus these two options provide the generic differentiation strategy for their customers, so that they can have different service depending to their interest and funding capability.

Low cost generic strategy:

Chine manufacturing products are offered at low cost in the world market. The Chinese explored low cost generic strategy to win the world market and they are now succeeding to a large extent. In the world everyone knows that Chinese products are cheaper products and this develops the purchase interest in their consumers.


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