Question

One of the big pitfalls in crafting a competitive strategy is that managers, who are torn about the pros and cons of the various generic strategies, will opt for "stuck in the middle" strategies that represent compromises between lower costs and greater differentiation, and between broad and narrow market appeal. True or false? Explain your answer.

Answer 1

Managers may opt for a "stuck in the middle" strategy, compromising between lower costs and greater differentiation, and between broad and narrow market appeal. Hence, the statement given is true.

Step-by-step explanation:

True. A competitive strategy demanding compromises between cost leadership and differentiation, or broad and narrow market appeal, can indeed leave a firm 'stuck in the middle'. Companies that attempt to be all things to all customers often face challenges in achieving the kind of market dominance and financial performance they might if they chose a more focused strategy.

Reflecting this, many businesses find success in concentrating on their core competencies. By specializing in a limited range of products or services, a firm can differentiate itself and achieve a competitive advantage. This concept echoes the pattern where athletes—or firms—aim to excel in a focused domain rather than compete with a large field at a mediocre level.