Michael Porter Defines Three Basic Strategies: Cost Leadership,differentiation,and Focus

question 22

Essay

Michael Porter defines three basic strategies: cost leadership,differentiation,and focus.Describe each,explain under what conditions each works,and what the pitfalls are of each one.

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Definitions:

Capital Expenditure

A type of spending undertaken by a business to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Revenue Expenditure

Expenses incurred during the normal course of business operations, which are consumed within the same accounting period.

Office Building

A structure designed and used primarily for the conduct of business and accommodative of administrative workers.

Land

A natural resource or property without buildings that is regarded as an asset on a balance sheet, representing the ground on which any structures or improvements can be made.