BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

STRATEGIC MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Porter argues that to be successful, a company or business unit must achieve one ofthe previously mentioned generic competitive strategies. Otherwise, the company orbusiness unit is stuck in the “middle of the competitive marketplace” with no competitiveadvantage and is doomed to below-average performance. A classic example-KMART
A
TRUE
B
FALSE
Explanation: 

Detailed explanation-1: -Michael Porter defines three strategy types that can attain a competitive advantage. These strategies are cost leadership, differentiation, and market segmentation (or focus).

Detailed explanation-2: -Porter argues that factors affecting competition are largely similar regardless of the industry. His five forces that shape competition include competition among existing competitors, bargaining power of customers, bargaining power of suppliers, threat of substitute products and threat of new entrants.

Detailed explanation-3: -Porter theorized that understanding both the competitive forces at play and the overall industry structure are crucial for effective, strategic decision-making, and developing a compelling competitive strategy for the future.

Detailed explanation-4: -Which of Porter’s competitive strategies concentrates on seeking differentiation in a particular buyer group, product line segment, or geographic market? cost proximity.

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