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Explain the Difference Between a Cost-Leadership Strategy and a Differentiation

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Essay

Explain the difference between a cost-leadership strategy and a differentiation strategy. Provide an example of a company that uses each type of strategy.


Definitions:

Command Economy

An economic system where the government makes all decisions on the production and consumption of goods and services.

Free Enterprise

An economic system based on private ownership and the freedom of individuals to start and manage their own businesses.

Laissez-Faire Economy

An economic system in which transactions between private parties are free from government intervention such as regulations, privileges, tariffs, and subsidies.

Coordinating Mechanism

A system or process used to organize and harmonize different activities or parties so that they work together efficiently towards a common goal.

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