Market Dissection

To Evaluate the use of the three generic strategies, consider Figure 1. The matrix shown demonstrates the relationships among strategies (cost leadership versus differentiation) and market segmentation (broad versus focused).

Hyundai is following a broad cost leadership strategy. It offers low-cost vehicles, in each particular model stratification, that appeal to a large audience.

Audi is pursuing a broad differentiation strategy with its Quattro models available at several price points. Audis differentiation is safety, and it prices its models higher than Hyundais to reach a large, stratified audience.

Kia has a more focused cost leadership strategy. Kia mainly offers low-cost vehicles in the lower levels of model stratification.

Hummer offers the most focused differentiation strategy of any in the industry (including Mercedes-Benz).

Create a similar graph displaying each strategy for a product of your choice. The strategy must include an example of the product in each of the following markets: (1) cost leadership, broad market; (2) differentiation, broad market; (3) cost leadership, focused market; and (4) differentiation, focused market. Potential products include cereal, dog food, soft drinks, computers, shampoo, snack foods, jeans, sneakers, sandals, mountain bikes, TV shows, movies.