Which of the following is a Porter's generic strategy?

• A. Focus
• B. Cost leadership
• C. Differentiation
• D. Market segmentation

Answer: (B)

Porter’s generic strategies describe how a firm can position itself to gain competitive advantage. The three broad options are cost leadership, differentiation, and focus. Cost leadership means aiming to be the lowest-cost producer in the industry, which lets a company either charge lower prices or maintain higher margins than rivals. That broad approach is the classic example of a Porter generic strategy, hence its selection here. Note that differentiation and focus are also Porter strategies, while market segmentation is a market-analysis technique rather than one of Porter’s named generic strategies.