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Porter’s generic strategies

Porter’s generic strategies describe competing through cost leadership or differentiation and through broad or focused market scope. A focused strategy can seek a cost or differentiation advantage in a narrower segment. Performance measures should support the chosen position: a differentiated service may need reliability and expertise rather than lowest cost alone. The framework highlights choices and trade-offs but should not be applied as a rigid ban on all combinations or innovation.

Worked example

A specialist repair firm differentiates through certified expertise and rapid response, so quality and availability are critical alongside cost.

Common mistake

Low selling price does not prove cost leadership, and adding expensive features does not prove customers value differentiation.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA APM Direct September 2026–June 2027
ACCA BT Supporting September 2026–June 2027
ACCA SBL Direct September 2026–June 2027
FIA FBT Supporting September 2026–June 2027