(a).Cost leadership. Trying to gain competitive advantage by being the cheapest producer in the market may be found in business-to-business markets, such as the supply of raw materials and component parts. The customer tries to buy cheaply in order to keep its own production costs down. However, in theory, only one firm in any market (or niche market) can be the least-cost producer: other companies need to adopt product differentiation strategies.

(b). Differentiation. Firms often compete in a market by differentiating their products from the similar products of competitors. The basis for differentiation is often product design (television sets, items of furniture, clothing, mobile telephones and so on). Other product features or marketing methods (advertising, or the selection of a different channel of distribution) might also be used to create differentiation.

(c). Focus. Many companies focus on a particular niche of a market. Within its chosen niche, the company needs to pursue a cost leadership or a product differentiation strategy. For example, within the broader market for hi-fi systems and sound systems, a company might specialise in providing headphones and speaker systems.