After completing a SWOT analysis, a company begins to set its strategy to advance from its current position. Porter describes a strategy spectrum whereby a company has two choices: cost leadership and product differentiation. Which of the following is a company who selected a product differentiation strategy?
A) Collectibles, Etc., is a collectibles store that specializes in hard-to-find collectibles.
B) IShadows is a makeup line that makes unique palettes combinations sold at drug stores.
C) Society 12 is an online art store that sells art prints for a reasonable price.
D) Woolies is a factory that strives to make affordable and practical wool socks.

Question

Quizplus · Accepted Answer

This question requires familiarity with SWOT analysis and the associated strategies. Choice A is correct since Collectibles, Etc. is using a product differentiation strategy by focusing on the variety and uniqueness of what they sell instead of trying to minimize the cost of what they sell. The other three choices are incorrect because they are either a cost leadership strategy or a company that sits on the spectrum between the two.

After Completing a SWOT Analysis, a Company Begins to Set