Final answer:
According to Porter, companies that wish to dominate broad markets should operate using a cost leadership with a low cost strategy. This means focusing on becoming the lowest-cost producer while offering products or services with acceptable quality. Small economies of scale, slashing prices, and a well-respected brand name are all factors that can contribute to the success of this strategy.
Step-by-step explanation:
According to Porter, companies that wish to dominate broad markets should operate using a cost leadership with a low cost strategy. This means that they focus on becoming the lowest-cost producer in the industry while offering products or services with acceptable quality. By doing so, they can attract a large customer base and achieve significant market share.
Cost leadership with a low cost strategy can be effective when there are small economies of scale in the industry compared to the size of demand. This means that companies can achieve cost advantages without requiring a large-scale production operation. Additionally, companies with a well-established reputation for slashing prices in response to new entry can further solidify their dominance in the market.
A well-respected brand name that has been carefully built up over many years can also contribute to a company's ability to dominate a broad market. It creates customer loyalty, trust, and differentiation, making it difficult for competitors to enter the market and replicate the same level of success.