An Analysis of Louis Brown Corporation's Operating Income Changes Between

Essay

An analysis of Louis Brown Corporation's operating income changes between year 1 and year 2 show the following:
Operating income for Year 1 $1,000,000
Add growth component 30,000
Add price-recovery component 200,000
Deduct productivity component (10,000)
Operating income for Year 2 $1,220,000
Required:
Is Louis Brown's operating income gain consistent with the product differentiation or cost leadership strategy? Explain briefly.