Michael E. Porter’s five generic strategies are :
Cost Leadership (Low Cost), Cost Leadership (Best Value), Differentiation, Focus (Low Cost), Focus (Best Value)
Option 3 — Cost Leadership (Low Cost), Cost Leadership (Best Value), Differentiation, Focus (Low Cost), Focus (Best Value) is correct.
Michael Porter originally proposed three generic competitive strategies — Cost Leadership, Differentiation, and Focus. In later strategic-management texts (notably Fred R. David's expansion), these are refined into five generic strategies by splitting the low-cost and focus routes into a “low-cost” and a “best-value” variant.
| Strategy | Basis of competitive advantage |
|---|---|
| Type 1 — Cost Leadership (Low Cost) | Lowest price to a wide range of customers |
| Type 2 — Cost Leadership (Best Value) | Best price-value to a wide range of customers |
| Type 3 — Differentiation | Unique products/services aimed industry-wide |
| Type 4 — Focus (Low Cost) | Lowest price to a small niche market |
| Type 5 — Focus (Best Value) | Best price-value to a small niche market |
Why the other options are wrong: Options (1), (2) and (4) mix and mislabel the categories — splitting Differentiation or Cost Leadership into “Large/Small” size labels, which is not how the five generic strategies are defined. Only option (3) lists the recognised five: two cost-leadership types, one differentiation type, and two focus types.
Takeaway: The five generic strategies are Cost Leadership (low-cost & best-value), Differentiation, and Focus (low-cost & best-value).
Similar Questions
When the target company uses the tactic of divestiture, to defend itself from a hostile takeover, it is said to sell the :
Pan Amsat developed a joint venture with Jsat Corporation to develop and send into orbit a small satellite. Which type of alliance the above statement represents ?
Who among the following has given the statement : “transition from single function focus to a multi function focus is essential for successful strategic management”?
__________ signals a strategic inflection point necessitating a radical strategic shift.
Match the items of List - I with List - II and select the code of correct matching :
List - I List - II (a) Merger of Vodafone and Idea (i) Business Strategy (b) Launch of Apple iphone 7 plus (ii) Operational Strategy (c) Manufacturing Samsung mobile handsets in India (iii) Corporate Strategy Code :
Which among the following is not a generic strategy ?
Which one among the following is not a correct statement ?
Which of the following statements is not correct about strategic management ?
Vertical merger is the merger of two firms which are involved in which one of the following forms ?
“Pepsi Co launched a hostile take over of Pepsi Bottling Group after its $ 4.2 billion offer was rejected”. Which strategy was used in this case ?
Important Questions from Strategic Management
When the organizational requirements advocate tight cost control; frequent, detailed control reports; structured organization and responsibilities and incentives based on meeting strict quantitative targets then it is called:
Which of the following strategies are types of combination strategies?
(A) No change strategies
(B) Pause/Proceed with caution strategies
(C) Turn around strategies
(D) Profit strategies
(E) Concentration strategies
As per Henry Mintsberg, which of the following is NOT a part of his conception of types of strategies?
- Strategic Management involves :
(a) Assessment of external environment
(b) Identification of subsystem
(c) Unity of command
(d) Span of control
(e) Assessment of resources and capabilities
(f) Identification of goal
Code : Put the following steps of strategic Management Process in correct sequence :
a. Scanning and Evaluation of Business Environment
b. Formulating strategies
c. Implementation of Corporate Strategy
d. Deciding about the Mission of the organisation
e. Setting Corporate Level Objective
Codes :
