What are Porter's generic strategies, and what does each emphasize?

• A. Cost leadership (lowest cost), differentiation (unique value), and focus (niche), with focus variants.
• B. Innovation, quality, speed.
• C. Market entry, exit, diversification.
• D. Customer service, branding, distribution.

Answer: (A)

Porter's generic strategies identify three ways a company can gain competitive advantage: cost leadership, differentiation, and focus, with focus having two variants.

Cost leadership aims for the lowest cost structure in the industry, so the firm can offer lower prices or maintain higher margins at market prices. Differentiation centers on delivering something unique and valuable to customers—be it features, quality, service, or brand—that justifies a premium price. Focus targets a narrow market segment and tailors either a low-cost position or a differentiated offering specifically to that segment, making the company the best choice for that niche.

The other listed ideas describe important capabilities or actions but aren’t the structured paths Porter outlined—these options don’t capture the broad vs. narrow scope and cost-versus-differentiation trade-offs at the heart of the generic strategies.