4(H)

Question 1

Porter’s lower cost strategy

Answer 1

Porter’s lower cost strategy involves a business offering customers similar or lower-priced products compared to the industry average, while remaining profitable by achieving the lowest cost of operations among competitors.

• no-frills
• economies of scale (bulk buying)

Question 2

Porter’s differentiation strategy

Answer 2

Porter’s differentiation strategy involves offering customers unique services or product features that are of perceived value to customers, which can then be sold at a higher price than competitors.

• innovation