Business-Level Strategy Vocabulary

Vocabulary flashcards covering definitions, strengths, and weaknesses of major business-level strategies.

Cost Leadership

A strategy focused on producing goods or services at the lowest cost to appeal to a broad market.

Cost Leadership – Strengths

High efficiency, price advantage, and broad customer appeal.

Cost Leadership – Weaknesses

Possible reduced quality, easy for competitors to imitate, and slim profit margins.

Differentiation

A strategy aimed at offering unique products or services that customers perceive as superior or distinct.

Differentiation – Strengths

Creates brand loyalty, allows premium pricing, and reduces price-based competition.

Differentiation – Weaknesses

Involves higher costs, risk of imitation, and constant need to maintain uniqueness.

Focused Cost Leadership

Targets a specific market segment with low-cost offerings.

Focused Cost Leadership – Strengths

Efficiently meets niche needs and encounters fewer competitors.

Focused Cost Leadership – Weaknesses

Small market size and vulnerability to being out-priced or out-niched.

Focused Differentiation

Offers unique products or services to a specific market segment.

Focused Differentiation – Strengths

Generates high customer loyalty and a strong brand identity within the niche.

Focused Differentiation – Weaknesses

Limited market size and potential difficulty in scaling or growth.

Integrated Cost Leadership/Differentiation

Combines elements of low cost and differentiation to provide superior customer value.

Integrated Strategy – Strengths

Flexible approach, diversified risk, and broad market appeal.

Integrated Strategy – Weaknesses

Challenging to sustain both cost advantage and uniqueness, risking being ‘stuck in the middle.’