Similarities and Differences between Differentiation and Lower Cost approaches?

[Travishobo]

Does anyone know any similarities and differences between differentiation and lower cost?
Thanks 

[magdichi]

Differences:
- The key difference between the two strategies is their focus. The cost leadership approach has an internal focus, with the business looking at generating economies of scales and efficiencies within the business to reduce costs. This compares with differentiation where there is an external focus. It depends on the business creating a unique product or service that meets a customer need and it actively markets and promotes this differentiation.
- Lower cost approach will tend to offer lower prices, benefiting from "price-sensitive consumers", whereas differentiation tends to offer higher-priced products and attract customers who are quality conscious and not as sensitive to price.

Similarities:
- Both easier for large businesses to spend money on research and development to innovate or use economies of scale to reduce costs.

The similarity is a bit iffy... i think the two differences are pretty clear though. Hope this helped!

[Boink]

Differences:
- The key difference between the two strategies is their focus. The cost leadership approach has an internal focus, with the business looking at generating economies of scales and efficiencies within the business to reduce costs. This compares with differentiation where there is an external focus. It depends on the business creating a unique product or service that meets a customer need and it actively markets and promotes this differentiation.
- Lower cost approach will tend to offer lower prices, benefiting from "price-sensitive consumers", whereas differentiation tends to offer higher-priced products and attract customers who are quality conscious and not as sensitive to price.

Similarities:
- Both easier for large businesses to spend money on research and development to innovate or use economies of scale to reduce costs.

The similarity is a bit iffy... i think the two differences are pretty clear though. Hope this helped!

I'd also like to add another similarity, which is that they both go through the same process when identifying which strategy to use (the steps when identifying which strategy a business should use out of the generic strategies).
Sorry, I couldn't help myself, I always find it safe to have 2 of each similarity and difference lol