Question

In Capsim, teams apply a strategy to their respective business as they compete for market share and profits. We have a total of six strategies to choose from, and each has a different way of delivering value to customers at an appropriate cost and generate an attractive profit. The table below identifies two generic strategies: cost leader and differentiation and each DOES have a different way of delivering value. On the table below, you will also find categories that relate to operations (revenue per unit, unit volume, etc.). For each generic strategy, the categories can be high or low. Label each strategy characteristic as – High, Low, or Depends.

	Cost Leader	Differentiation
Revenue per unit
Unit volume
COGS per unit
Research and development

Answer 1

Each strategy characteristic is labelled as below

	Cost Leader	Differentiation
Revenue per unit	High	High
Unit volume	High	Depends
COGS per unit	Low	High
Research and development	Low	High