Question

. Discuss the four generic strategies (cost, focus, etc.) including the pros/cons of each and when they might be most effective. For our purposes,  focus is considered one strategy (you don’t have to differentiate between cost focus and differentiation focus). What is the primary risk when discussing generic strategies? with real world example

Answer 1

	Pros	Cons	Risks with example
1. Cost Leadership	1. More profits through lower costs	1. Only one winner 2. Benefitial when the consumers are price sensitive 3. Chances of replicability is more 4. could lead to a damaging price wars	Toyota is a classic case, where efficiecncy was built in the production line that helped it to dominate the market. But the risks are high as slowly others have replicated the same model and now the competitive advantage is weaning
2. Differentiation	1. Higher profits by value addition 2. Product uniqueness	1. Costs are higher 2. With new innovations the lifecycle is decreasing	Vulnerability to even lower cost operators, Fitbit getting cheap Mi /Chinese substitutes, providing less value but at way cheaper rates
3. Cost Focus	1. Concentrating on niche market to drive lower costs 2. Lower business operation expenses	1. Value is seen by only a limited set of consumer 2. lot of users see it as cheap	Tide, though is a mass product now, it was targetted in a different way to consolidate P&G's position though white clothing solution at low cost. Even the product was great, a lot of users have taken it as a cheap product and do not give it the adequate value
4. Differentiation Focus	1. Focusing on differentiation for a limited set of users 2. Lower operational expenses	1. Value is seen by only a limited set of consumer 2. many users see this as expensive	BMW, even when they launched new cars in the budget segment they are perceived as expensive, as they had created the focus differentiation and hence premium tag for themselves