Which of the following best describes a focused low-cost strategy in the context of competitive markets?

• A. Focusing on product differentiation within a broad market
• B. Targeting a narrow market segment while offering products at lower costs than competitors
• C. Offering a wide variety of products at premium prices to all market segments
• D. Competing in all market segments by matching competitors' prices

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of a 'focused low-cost strategy' in competitive markets. This strategy involves targeting a specific, narrow market segment rather than the entire market.
2. Step 2: Recognize that the goal of this strategy is to offer products or services at a lower cost than competitors within that narrow segment, thereby gaining a competitive advantage through cost leadership.
3. Step 3: Differentiate this from other strategies such as broad differentiation (which targets a wide market with unique products) or broad cost leadership (which targets the entire market with low prices).
4. Step 4: Analyze each option by checking if it aligns with targeting a narrow segment and maintaining lower costs relative to competitors in that segment.
5. Step 5: Conclude that the best description of a focused low-cost strategy is the option that emphasizes targeting a narrow market segment while offering products at lower costs than competitors.