Critics of LaCroix believe it is pursuing a cost-leadership strategy when it should be pursuing a differentiation one. Which of the following best completes the sentence?

• A. differentiation; cost-leadership
• B. cost-leadership; differentiation
• C. monopoly; competitive
• D. price-skimming; penetration pricing

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the two main generic strategies in business competitive advantage: cost-leadership and differentiation. Cost-leadership focuses on becoming the lowest-cost producer in the industry, while differentiation focuses on offering unique products or services that justify a premium price.
2. Step 2: Analyze the sentence structure: 'Critics of LaCroix believe it is pursuing a ___ strategy when it should be pursuing a ___ one.' The first blank should describe what LaCroix is currently doing, and the second blank should describe what critics think LaCroix should do instead.
3. Step 3: Evaluate the options given. The correct completion should reflect that LaCroix is currently pursuing one strategy but should switch to the other. Since critics believe LaCroix is pursuing cost-leadership but should pursue differentiation, the correct pair is 'cost-leadership; differentiation'.
4. Step 4: Eliminate other options by checking if they logically fit the sentence. For example, 'differentiation; cost-leadership' reverses the intended meaning, and 'monopoly; competitive' or 'price-skimming; penetration pricing' do not fit the context of generic competitive strategies.
5. Step 5: Conclude that the best completion of the sentence is 'cost-leadership; differentiation' because it correctly reflects the critics' viewpoint about LaCroix's current and recommended strategies.