Why Are Differentiation and Cost-Leadership Strategies Referred to as Generic

question 95

Multiple Choice

Why are differentiation and cost-leadership strategies referred to as generic business strategies?

• A) They can be simultaneously pursued by a firm without any trade-offs.
• B) They can be used by any organization independent of industry context.
• C) They require similar strategic positions in order to increase a firm's chances to gain competitive advantage.
• D) They can be applied only by businesses, which have a competitive advantage.

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service.

Marginal Revenue

The increase in total revenue resulting from the sale of one additional unit of a product or service.

Value of the Marginal Product

The additional revenue a firm generates from employing one more unit of input, keeping other inputs constant.

Marginal Productivity

The additional output generated by adding one more unit of a specific input, while holding all other inputs constant.