Certified Internal Auditor (CIA) Part 3: Business Knowledge for Internal Auditing — Question 80

According to Porter's model of competitive strategy, which of the following is a generic strategy?
1. Differentiation.
2. Competitive advantage.
3. Focused differentiation.
4. Cost focus.

Answer options

• A. 2 only
• B. 3 and 4 only
• C. 1, 3, and 4 only
• D. 1, 2, 3, and 4

Correct answer: C

Explanation

The correct answer is C, as Differentiation, Focused differentiation, and Cost focus are all recognized as generic strategies within Porter's model. Competitive advantage, while important, is not classified as a generic strategy itself, which is why option A and D are incorrect. Option B is also incorrect as it omits Differentiation, which is a key generic strategy.