Are the generic business-level strategies of differentiation and cost leadership incompatible? Explain

Differentiation is a business model that seeks to improve a company's uniqueness. Cost leadership is a strategy in which a firm strives to be the low-cost producer. Some companies have pursued a differentiation approach, but they have done so in a way that allows them to lower their cost structure as well. Broad differentiators may have a cost structure that is higher than the cost leaders and a level of product differentiation that is less than the most differentiated product in the market. However, they may be able to provide more value to customers if they can balance the tradeoff between differentiation and cost. The broad differentiation model may allow a company to realize the benefits of being in the middle of differentiators and cost leaders, but this could be desirable if they can still offer a somewhat differentiated product at a premium price (compared to cost leader). Over time, successful broad differentiators can grow their profits, which gives them more capital to reinvest in their business and continually improve their business model and continue to increase both differentiation and lower their cost structure. Over time, differentiators and cost leaders may find that broad differentiators have completely taken away their competitive advantage. The danger with this approach, however, is that a firm moving in both directions simultaneously may end up "stuck-in-the-middle with no real source of competitive advantage.