Pressure for cost reductions encourages a firm to pursue a cost-leadership strategy,while pressure for local responsiveness encourages a firm to pursue differentiation.

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This is because a cost-leadership strategy focuses on providing products or services at a lower cost than competitors, which requires the company to cut costs as much as possible. On the other hand, a differentiation strategy focuses on providing unique and customized products or services that meet the specific needs and preferences of local markets, which requires the company to invest in research and development and adapt to local cultural, social, and economic factors.

Pressure for Cost Reductions Encourages a Firm to Pursue a Cost-Leadership