Explore BrainMass

Differentiation and Cost Leadership Strategy

- Discuss how differentiation and cost leadership can be employed to create and sustain a competitive advantage.
- Discuss the strategies in terms of Social Networking Application
- What are the pros and cons of each?
- Which of the strategic options would you recommended and why?

Solution Preview

The response addresses the queries posted in 1021 words with references.

// Differentiation and Cost Leadership are the types of generic strategies adopted by the firm to have sustainable competitive advantage over its competitors. In this paper, first we will discuss about the meaning of differentiation and cost leadership strategy and then we will discuss how these strategies help the companies to achieve competitive edge over its competitors. //


In Differentiation strategy, the company provides the product with unique features other than its basic features to their customers to meet their special needs for which, they are ready to pay premium to the company. Cost Leadership strategy states that the company should provide goods and services to its customer at the lowest cost by maintaining the quality and features of the product to its customer (Ireland, Hoskisson, & Hitt, 2008).

Role of Strategic Options to Sustain a Competitive Advantage

Firms should use superior resources and capabilities, so that none of its competitors are able to copy it. Resources may consist of patents, trademarks, reputation of the firm, customer base and technical know- how. The ability to utilize the firm's resources effectively is known as capability. Distinctive competencies facilitate innovation, ...

Solution Summary

The response addresses the queries posted in 1021 words with references.