Which of the following statements about simultaneously pursuing both a low-cost strategy and a differentiation strategy is true?
A) Organizations stuck in the middle tend to have high levels of performance than those that pursue a low-cost or a differentiation strategy.
B) Focusing on differentiation of a product will result in reduced costs for a company.
C) Extremely well managed companies may be able to keep low costs and differentiate their products.
D) Managers try to gain a competitive advantage by focusing only on driving the company's costs down below the costs of industry rivals.
E) Managers try to gain a competitive advantage by focusing only on distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service.

Question

Quizplus · Accepted Answer

Simultaneously pursuing a low-cost strategy and differentiation strategy, also known as hybrid strategy, is difficult but not impossible. Extremely well-managed companies may be able to keep low costs and differentiate their products, giving them a competitive advantage in the market. However, organizations stuck in the middle tend to have lower levels of performance than those that pursue a clear low-cost or differentiation strategy. Focusing on differentiation alone may not result in reduced costs for a company, and focusing on cost reduction alone may not differentiate the products from competitors.

Which of the Following Statements About Simultaneously Pursuing Both a Low-Cost