Final answer:
A firm may not be able to pursue both a cost leadership strategy and a differentiation strategy due to different approaches, internal conflicts, and resource limitations.
Step-by-step explanation:
A firm may not be able to pursue both a cost leadership strategy and a differentiation strategy simultaneously due to a few reasons:
- Cost leadership strategy aims to achieve the lowest cost of production in the industry, while differentiation strategy focuses on creating unique and valuable products or services. These strategies require different approaches, resource allocations, and organizational structures, making it difficult for a company to excel at both.
- Implementing both strategies can lead to internal conflicts and challenges. For example, cost leadership may require streamlining operations and reducing customization, which contradicts the focus on uniqueness and customization required by differentiation strategy.
- Pursuing both strategies simultaneously can dilute a company's resources, making it less effective in achieving either strategy's goals. Companies may spread themselves too thin by trying to serve different customer segments with different preferences and needs.