Question
Samsung is offering customers something better and more unique. The management team at Apple is troubled-by the fact that Samsung is leapfrogging ahead of Apple. Can Apple create some overlap between Porter's (1985) cost-leadership and differentiation competitive strategy? A. Yes B. No A
Answer
4.4
(251 Votes)
May
Elite · Tutor for 8 years
Answer
A
Explanation
This is essentially a question of understanding business strategy theories developed by Michael E. Porter. Porter's theories (1985) dictate that a company could focus on either cost-leadership (being a low-cost producer) and differentiation (developing unique products) strategies, but not both concurrently, as these strategies require different organizational structures, resources, and control systems. However, in the context of companies such as Apple, there is room for debate. Apple could develop a hybrid or integrated strategy, to balance between cost-leadership and differentiation, leading to unique, high quality products at affordable or competitive prices. Factors interfering might be innovation, cost optimization, and strategic decisions which align product development efforts with overall corporate strategy. However, such an approach entails challenges and risks, as it sets requirements of control systems and organizational flexibility. Therefore, while there's no absolute yes or no, the possible option must be well argued.