Question 1: Is it possible for a company or SBU to follow both cost leadership & Differentiation strategy at the same time? Why or Why not? The dilemma between the pursuit of cost leadership and differentiation has been around for over three decades now. Until recently, it was thought that the two approaches to achieving a sustainable competitive advantage were mutually exclusive. Classic examples of cost leadership include Southwest Airlines, Nucor and Wal-Mart. On the other hand, Apple, BMW and Sony are known to be differentiators. The argument for mutual exclusivity is rather trite – if you are a cost leader, you cannot afford to provide distinguishing features or services. If you are a differentiator, the need to constantly innovate has the inevitable propensity to push up costs. Cost leadership makes eminent sense in any industry, any time and anywhere. Other things being the same, if your costs are less than that of competition, even in a highly competitive environment, your margins would be higher. This is particularly true of
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This note was uploaded on 03/07/2012 for the course FINANCE 280 taught by Professor Saira during the Spring '12 term at IMSciences.