In order to gain competitive advantage, Professor Michael E. Porter identified basic strategies that fall into which categories?

The correct identification of basic strategies for gaining competitive advantage, as articulated by Professor Michael E. Porter, centers on the principles of cost leadership and differentiation. Among the choices provided, the mention of price leadership and product differentiation closely aligns with Porter's framework.

Price leadership, while not a term Porter explicitly uses, relates to the broader strategic aim of cost leadership. This strategy focuses on becoming the lowest-cost producer in an industry, allowing firms to either offer lower prices than competitors or maintain average prices to achieve higher margins.

Product differentiation is a cornerstone of Porter’s model, where firms seek to offer unique products or services that stand out from competitors. This uniqueness can derive from various attributes such as quality, features, branding, or customer service, which can help firms command premium prices or build brand loyalty.

The other options present strategies that, while important in various contexts, do not directly reflect Porter's foundational strategies for achieving competitive advantage. Market penetration and development, for example, pertain more to growth strategies rather than the fundamental operational approaches to competition.