Suppose a friend of yours was seeking to have a new house built by one of 2 local builders. Knowing that you are studying business strategy, your friend approaches you with a question about the 2 builders. One builder has told your friend that their company follows "low-cost" strategy, and the other builder has told your friend that their company follows a "differentiation"strategy. Your friend doesn't understand what the builders mean, and wants to know what this all has to do with building a house.

1. What would you tell your friend in terms of the pros and cons of each builders' strategy?

2. What does it means to your friend in terms of the actual details of how the house would be built (labor, materials, etc.), and what outcomes to expect from each builder?

3. How would you advise your friend as to which builder to use?