T.12 Porter’s generic strategies questions for IB Business Management

Mazury Mattresses

Mazury Mattresses (MM) is a Polish private limited company that makes foam and spring mattresses in Olsztyn. It sells mid-range mattresses through furniture stores across Poland. Its sales have been flat for three years: large international firms dominate the budget segment with low prices, and premium brands dominate the high end.

MM’s managing director, Tomasz Kowalski, describes MM as “stuck in the middle”. He is considering two strategies:

• Strategy A (cost leadership): automate production, reduce the range to six models, and cut prices by 25 % to compete in the budget segment.

• Strategy B (differentiation focus): develop mattresses for people with back pain, designed with physiotherapists, with a 100-night free trial, sold online and through physiotherapy clinics at premium prices.

Table 1: The Polish mattress market, 2025 (total sales 2.4 million mattresses)

MM sold 96 000 mattresses in 2025, all in the mid-range segment.

Saphi Quinua (SQ)

Read the resources and answer the questions that follow.

Saphi Quinua (SQ) is a social enterprise owned by a co-operative of 450 Aymara and Quechua farming families on the high plains near the Uyuni salt flat in Bolivia, 3 700 metres above sea level. They grow quinua real (royal quinoa), large-grained varieties that grow only in this harsh climate, using organic methods and llama manure. SQ cleans, grades and exports the quinoa in bulk to importers in Europe and North America. Saphi means “root” in Quechua. SQ’s profits pay for a better price to members and for soil conservation.

Image: a field of quinoa plants with tall heads in red, orange and purple under a deep blue sky, with llamas grazing in the distance and white salt flats on the horizon. A hessian sack in front is stamped “Saphi Quinua – Quinua Real, Bolivia. Organic”.

Resource 1 – News article from *Altiplano Agro Semanal*

From golden grain to price slump: Bolivia’s quinoa farmers search for a future

When world demand for quinoa soared in the early 2010s, prices tripled and many highland families planted more. Since then, farmers in Peru’s irrigated coastal valleys – and in countries as far away as the USA and China – have begun growing quinoa at much higher yields, and prices have fallen sharply. Bolivia’s royal quinoa is still prized by chefs for its size and flavour, but most buyers see quinoa as a standard commodity.

Table 1: Quinoa prices and yields

Resource 2 – Social media posts from a farmer and a customer

Doña Teodora, SQ member: My grandparents grew quinoa when only poor people ate it. Then the whole world wanted it and we built a school. Now the price is low again and young people leave for the city. Our quinoa is the best in the world – why is it sold like any other? [1/2]

@kitchen.berlin, a chef in Germany: Tried Bolivian royal quinoa today, grains twice the size of the usual stuff, nutty and firm. I would pay more if I could buy it with the farm’s name on it. Where can I get it? [2/2]

Resource 3 – Internal email from Rubén Mamani, SQ’s general manager, to the co-operative council

From: Rubén Mamani, General Manager

To: Co-operative council

Subject: Our strategy: we cannot be everything

Our cost of producing and exporting a tonne of quinoa is about USD 1 900, far above the cost of growers in Peru’s valleys. Last year we sold 1 400 tonnes of organic bulk quinoa at USD 2 400 a tonne. Using Porter’s generic strategies, I see these choices:

1. Cost leadership: mechanize and plant more land to compete on price in bulk markets.

2. Differentiation focus: sell part of our crop as a premium “Quinua Real” brand, in retail packs, to speciality shops and restaurants in Europe and Japan, with each pack traced to the family that grew it.

3. Cost focus: supply Bolivia’s school-meals programme, which buys large volumes at USD 1 800 a tonne.

Option 2 would need about USD 350 000 for packing equipment, certification of origin and marketing.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Costs and prices for each market (USD per tonne)

Resource 5 – Survey of 60 European speciality food buyers

Resource 6 – Interview with Dr Elena Quispe, an agronomist

“During the boom many families ploughed fragile land and sold their llamas, so there was less manure for the soil. Yields are falling in some areas and dust storms are more common. Mechanizing and planting more land to cut costs would make this worse. The high plains can never compete with irrigated valleys on cost – but no other place can grow these varieties.”

Saathi Air Ltd (SA)

SA is a low-cost airline based in Hyderabad, India. It flies only one aircraft type, sells tickets only through its own app, charges extra for checked bags and meals, and turns its aircraft around in 25 minutes so that each plane flies up to eight short routes a day. SA’s fares are among the lowest on every route it serves.

Table 1: Operating data for SA and a full-service rival, 2025

1 crore = 10 000 000.

Lái Thiêu Furniture Co., Ltd (LT)

LT is a family-owned furniture maker in Bình Dương province, Vietnam. For 30 years it has made solid wood chairs and tables in small batches for local shops. Competition from large factories has cut its profits, and its director, Nguyễn Thị Hằng, believes LT must choose a clear strategy. She is considering two options for a new export business:

• Option A: make flat-pack dining chairs from plantation rubberwood for a large European home-furnishing retailer, which wants a low price and has offered a three-year contract.

• Option B: make hand-woven rattan chairs, designed with a Vietnamese designer, for boutique hotels and restaurants in Japan and Australia, sold through LT’s own website and at trade fairs.

Table 1: Forecast annual data for the two options

Option A would mean moving from batch to flow production. Hằng’s son, Minh, who manages production, prefers Option B: he says LT’s 60 skilled craftworkers are its main strength and that the retailer could move to a cheaper supplier when the contract ends.

Two businesses in Seoul, South Korea, teach Korean only to foreign adults. Hangeul Hub runs large online drop-in classes for backpackers and short-stay workers. Lessons are pre-recorded with a live tutor answering questions in a chat, and cost KRW 5 000 each, less than half the price of other schools. Seoul Diplomat Academy offers one-to-one lessons for embassy staff and business executives, taught by former interpreters at the client’s office, with lessons on business etiquette. It charges KRW 150 000 an hour.

With reference to the two schools, distinguish between a cost focus strategy and a differentiation focus strategy.

Table 1 shows information on four gyms in the Üsküdar district of Istanbul, Türkiye.

Table 1: Gyms in Üsküdar, 2025