Question

1) Cost leadership strategy, 2) Product differentiation strategy.

Are these two strategies mutually exclusive ? Or can they be combined in an efficient way ?

Answer 1

A cost leadership strategy aims to exploit scale of production, well-defined scope and other economies (e.g., a good purchasing approach), producing highly standardized products, using advanced technology. In recent years, more and more companies have chosen a strategic mix to achieve market leadership.

In economics and marketing, product differentiation is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own products.

Yes, these two strategies mutually exclusive, but these two process can be combined in a efficient way. For example if a company manufactures or purchase product by using Costleadership strategy, the same company can uses Product differentiation strategy, for the betterments or to make differentiation of the product in market for earning good will.