Financial ManagementQuestion 5559 of 217
All Questions

12. As per strategies propagated by Michael Porter, niche marketing strategy for transporting goods through airways for a large customer segment on an assurance of 'delivery by next day', is known as:

Options

ACost leadership strategy
BDifferentiation strategy
CFocus differentiation strategy FINANCIAL MANAGEMENT AND STRATEGIC MANAGEMENT
DFocus cost leadership strategy
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option CFocus differentiation strategy FINANCIAL MANAGEMENT AND STRATEGIC MANAGEMENT

All Options:

  • ACost leadership strategy
  • BDifferentiation strategy
  • CFocus differentiation strategy FINANCIAL MANAGEMENT AND STRATEGIC MANAGEMENT
  • DFocus cost leadership strategy

Ad

Detailed Solution & Explanation

The correct answer is **Option C: Focus Differentiation Strategy**.

**Context from Case Scenario (SEP 2024 Paper 6):**
The PDF states: *"One of the customer segments is looking for fast delivery of its goods in major cities all across the country. The prime consideration of such customers is quick and safe delivery of their products, irrespective of cost for the same. The target market of such services is very large and also increasing very fast. In view of the same, the company wants to reform its operation, by engaging a dedicated team to perform with a niche marketing strategy for transporting such goods through airways on an assurance of 'delivery by next day'."*

**Explanation — Michael Porter's Generic Strategies:**
Porter identified three generic competitive strategies:
1. **Cost Leadership** – Competing on the lowest price across a broad market.
2. **Differentiation** – Offering unique, value-added features across a broad market.
3. **Focus** – Targeting a **narrow/niche segment**, either through cost (Focus Cost Leadership) or uniqueness (Focus Differentiation).

In this case:
- The company is targeting a **specific niche** customer segment — those who want guaranteed next-day delivery via airways, **irrespective of cost**.
- The basis of competition is **differentiation** (speed and guaranteed delivery, not price).
- The market scope is **narrow/niche** (a particular segment of customers requiring express airfreight).

This combination — niche market + differentiation basis — is precisely the **Focus Differentiation Strategy**.

**Why other options are wrong:**
- **Option A – Cost Leadership**: The company is not competing on low cost; customers are willing to pay irrespective of cost.
- **Option B – Differentiation**: Broad differentiation applies to a wide market, not a niche segment.
- **Option D – Focus Cost Leadership**: This applies when the niche is served at the lowest cost; here, the differentiating factor is speed/assurance, not cost.

Hence, **Option C** is the correct answer.

More Questions from Financial Management

Ready to Master Financial Management?

Practice all 217 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free