After completing a SWOT analysis, a company begins to set its strategy to advance from its current position. Porter describes a strategy spectrum whereby a company has two choices: cost leadership and product differentiation. Which of the following is a company who has selected a cost leadership strategy?
A) Beauty You is a salon that specializes in trendy haircuts tailored to each client.
B) Cost Mart is a big box store that sells items at the cheapest price in town.
C) Itsy is an online marketplace where vendors sell unique handmade items.
D) Oldies is a vintage car dealership that sells high-end vintage vehicles.

Question

Quizplus · Accepted Answer

This question requires familiarity with SWOT analysis and the associated strategies. Choice B is correct since Cost Mart is using a cost leadership strategy by focusing on minimizing the cost of what they sell as compared to offering the variety or uniqueness of what they sell. The remaining three choices are incorrect as they are either a product differentiation strategy or a company that sits somewhere on the spectrum between the two options.

After Completing a SWOT Analysis, a Company Begins to Set