3.1.2 Porter Generic Strategies

Question 1

What is Porters two strategies?

Answer 1

•Cost Effective
•Differentiation

Question 2

What is cost effective?

Answer 2

Being the lowest cost operator in the market.

Question 3

How can a business achieve cost effective?

Answer 3

•Technology
•Economies of scale
•Skills and materials
•Scale of business
•Control supply

Question 4

Name two benefits of cost effective.

Answer 4

1)Low prices» Increase market share

2)High profit margin

Question 5

Name a disadvantage of cost effective.

Answer 5

Not all businesses can achieve due to only a few being able to compete on cost

Question 6

What is differentiation?

Answer 6

Having a unique product or service

Question 7

What are some of the quality’s of differentiation?

Answer 7

•Quality
•Customer service
•Speed and efficiency
•Marketing

Question 8

What are advantages of differentiation?

Answer 8

• Stand out
•Brand image»> lowers PED» high prices

Question 9

What is a disadvantage of differentiation?

Answer 9

Businesses can copy the unique product if it is not sustainable or patented