A company implements a strategy focusing on cost leadership by producing goods at the lowest cost while maintaining acceptable quality. Which category does this strategy primarily belong to?

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Seekh · Accepted Answer

The cost‑leadership strategy is one of Michael Porter’s three generic business strategies, the others being differentiation and focus. It is a strategy that seeks to become the lowest‑cost producer while still meeting customers’ quality expectations. By keeping production, distribution, and marketing costs as low as possible, the firm can offer lower prices or higher margins. For example, a fast‑food chain that standardizes its menu and streamlines its supply chain to reduce ingredient and labor costs can undercut competitors while still serving acceptable quality. Thus, it belongs to Porter’s “cost leadership” category.

A company implements a strategy focusing on cost leadership by producing goods at the lowest cost while maintaining acceptable quality. Which category does this strategy primarily belong to?

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