What is Differentiation strategy/low cost strategy?

 

In the low cost strategy, a company must have a thorough understanding of costs and how to continually reduce them.  The company must be willing to standardize its offerings in order to manage costs, which implies that exceptions requested by prospective customers must be limited or excluded in order to keep costs down.

 

In a differentiation strategy, the company must totally understand its customers’ needs and preferences.  It must be driven to innovate to continually address those wants and needs.  And, it must build its brand to maintain its position and visibility.

 

Differentiation strategy is imitation  and low cost strategy is saving 

The point is that instead of differentiation/cost trade off you can pursue both differentiation and low cost at the same time and create a market space that does not exist before and outperforming competition.(focus on non customers) For example if you want to start in airline industry instead of focusing on market you can shift your attention on non customers(taxi passengers) and designing an airline which bring then the quality of plane(speed.)with low cost of taxi by eliminating some services of plane.(not as easy as it seems) This means differentiation and low cost.w which can open a huge new market for you For more questions you can contact me.

Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. There are three generic strategies, either lower cost, differentiated, or focus. A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a higher price. A company also chooses one of two types of scope, either focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments. The generic strategy reflects the choices made regarding both the type of competitive advantage and the scope. The concept was described by Michael Porter in1980