Business Driven Technology 6th Edition by Paige Baltzan

Exercise 13

Market Dissection
To illustrate the use of the three generic strategies, consider Figure AYK.1. The matrix shown demonstrates the relationships among strategies (cost leadership versus differentiation) and market segmentation (broad versus focused).
Hyundai is following a broad cost leadership strategy. Hyundai offers low-cost vehicles, in each particular model stratification, that appeal to a large audience.
Audi is pursuing a broad differentiation strategy with its Quattro models available at several price points. Audi's differentiation is safety and it prices its various Quattro models (higher than Hyundai) to reach a large, stratified audience.
Kia has a more focused cost leadership strategy. Kia mainly offers low-cost vehicles in the lower levels of model stratification.
Hummer offers the most focused differentiation strategy of any in the industry (including Mercedes-Benz).
FIGURE AYK.1 Porter's Three Generic Strategies

Project Focus
Create a similar graph displaying each strategy for a product of your choice. The strategy must include an example of the product in each of the following markets: (1) cost leadership, broad market, (2) differentiation, broad market, (3) cost leadership, focused market, and (4) differentiation, focused market. Potential products include:
Cereal
Dog food
Soft drinks
Computers
Shampoo
Snack foods
Jeans
Sneakers
Sandals
Mountain bikes
TV shows
Movies