CLEP Principles of Management Exam Prep

Answer: a, c and d - Cost, focus and differentiation are Porter’s Generic Strategies.
Cost leadership means you can make a good for less than anyone else. This allows the firm to earn higher profits than competitors and price some of them out of the market. Cost leadership creates economies of scale, skilled product design, efficiency in manufacturing and cost-effective distribution.
Focus is the niche strategy, carving out a small segment and creating goods and services that meet specific needs.
Differentiation means developing goods that have unique attributes or combinations of features that appeal to customers. Note that marketing excellence is a method of differentiation.

Key Takeaway: This is a clear and concise way to articulate and summarize the possible options for a company to compete. When asked what direction a company should go in, your answer must fall into one of these categories.