In a purist world like Michael Porters, Strategy can come down to either ‘Differentiation’ or ‘Cost’
Summary of this Harvard article below.
Full article: Avoid Making This Strategic Mistake in a Recession
Hopefully it gives you a helpful perspective:
‘Differentiators’ compete based on a variety of factors, such as quality or service, not just low prices
‘Cost’ leaders, focus their strategy on reducing costs, enabling them to offer the product for the lowest possible price
In current times, a strategist might think it wise to change strategies by moving toward cost leadership. Although, we found that when differentiators did this, it did not help.
So, what should a differentiator do?
Do not try to change strategies. A differentiator will never out-cost a cost leader. Differentiators are better off building on their strengths
Reduce costs quickly…to a point
Be careful that these cuts do not jeopardize the ability to deliver a differentiated product or service. Simply reducing prices will not solve the problem.
Instead, focus on your strengths. The advantages that made your product or service worth more in the first place.
Make that case to your customers. Imagining the grass to be greener, is not a viable solution.