Now we can combine the dimensions describing a firm’s strategic position (
differentia-
tion vs. cost
) with the scope of competition
(
narrow vs. broad
)
. As shown in Exhibit 6.2 , by
doing so we get the two major generic (or broad) business strategies
(
cost leadership
and
differentiation
)
, shown as the top two boxes in the matrix, and what are termed the
focused
version of each (shown as the bottom two boxes in the matrix). The focused versions of the
strategies—
focused cost-leadership strategy
and
focused differentiation strategy
—are
essentially the same as the broad generic strategies
except
that the competitive scope is
narrower. The manufacturing company BIC pursues a focused cost-leadership strategy,
offering disposable pens and cigarette lighters at a very low price (often free promotional
giveaways by companies), while Mont Blanc pursues a focused differentiation strategy,
offering exquisite pens priced at several hundred dollars.
The automobile industry provides an example of the
scope of competition.
Alfred P.
Sloan, long-time president and CEO of GM, defined the carmaker’s mission as providing
a car for every purse and purpose.
GM was one of the first to implement a multidivisional