Market Dissection

To illustrate the use of the three generic strategies. The matrix shown demonstrates the relationships among strategies (cost leadership versus differentiation) and market segmentation (broad versus focused).

• Hyundai is following a broad cost leadership strategy. It offers low-cost vehicles, in each particular model stratification, that appeal to a large audience.

• Audi is pursuing a broad differentiation strategy with its Quattro models available at several price points. Audi's differentiation is safety, and it prices its models higher than Hyundai's to reach a large, stratified audience.

• Kia has a more focused cost leadership strategy. Kia mainly offers low-cost vehicles in the lower levels of model stratification.

• Hummer offers the most focused differentiation strategy of any in the industry (including Mercedes-Benz).