Is it possible for a company or business unit to follow a cost leadership strategy and a differentiation strategy simultaneously? Why or why not? It is possible for a company to continue a cost leadership strategy and a differentiation strategy simultaneously but it does not work for everyone. Some businesses rather follow the low cost way by striving for efficiencies and economies of scale rather than focusing on differentiating themselves from the competitors in a way other than price. Some
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and cons of each alternative. Alternative of low cost Pros * New traffic for budget conscious customers * More sales volume Cons * More needed space to hold product * Less product available because selling product faster * More labor required for replenishment of inventory and store front * More disgruntled employees from sheer volume of customers * High employee turnover from stress Alternative of differentiation Pros * Highlights company strengths and niches
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Low-Cost Leadership and Differentiation Strategies Laura Allard November 21‚ 2010 William Hogan Management Cases Upper Iowa University Abstract This paper discusses Low-Cost Leadership and Differentiation business strategies. The paper explains what each strategy is and how they can be applied‚ utilized and maximized as strategies for a company. Suggestion of methods to implement and the strategies are discussed‚ including when the strategies work best. Low-Cost and Differentiation Strategy
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competitive strategies are cost leadership‚ differentiation and focus. Each factor has its own advantages and disadvantages. A company should balance these factors in order to be successful. For growing industries‚ there are several other sub factors like chaining‚ franchising‚ etc. Our article will focus primarily on the generic factors as they are applicable to most of the industries and the challenges that the companies face with these strategies The cost leadership is the most discussed competitive
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and briefly explained below. (i) Low Cost Leadership Strategy The Company aims to become and remain the lowest – cost producer and distributor in the industry. (ii) The Broad Differentiation Strategy The Company strives to produce and distribute a product or service that is perceived as unique throughout the whole industry. (iii) The Best Cost Provider Strategy This strategy combines the low cost leadership and the broad differentiation strategies. The Company aims to give
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Performance 24 (1981): 663-688. 31 Jan. 2006 . Hitt‚ Michael A. Strategic Management - Competitiveness and Globalization: Concepts. 6th ed. South-Western College Pub‚ 2004. 105-123. Jones‚ Gareth R.‚ and John E. Butler. "Academy of Management Review." Costs‚ Revenue‚ and Business-Level Strategy 13 (1988): 202-213. 31 Jan. 2006 . Shapiro‚ Carl. "The RAND Journal of Economics." The Theory of Business Strategy 20 (1989): 125-137. 1 Feb. 2006 . "Strategy." Business-level competitive strategy: a contingency
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Nasi Lemak Biasa Consumer Segment: Demographic factors where focused on the age‚ income‚ sex‚ family life cycle and location. Buyers: School children from a nearby school‚ families from the nearby neighborhood and office workers from the area. Business Level Strategy: Use cost leadership strategy. This strategy is an integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost‚ relative to those of competitors. By using this strategy
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offer Exceed 12.000 items in number") to allow a lack of diversification for export market: every type of consumer that is part of the target audience can find products of his choice‚ ignoring the others (which will be desirable by other consumers focused on other features). In this way this strategy exceeds its traditional limit. As it is written in the text under consideration "IKEA has achieved the impossible‚ to create a range of products attractive to consumers everywhere‚ in countries with very
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in Crisis Signs of a crisis; declining performance measures e.g mkt share‚ roce‚ margins‚ revenues‚ profits‚ increasing costs‚ staff exodus Sources of a crisis Defects in management/ Poor management/neglecting key tasks Failure to change with changing environment Over-expansion Corruption Lack of resources Too much debt Poor strategy Failure to control costs/high costs Saturated mkts Poor integration High competition (unanticipated)/competitive forces Political change Change in tastes
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Mc Donald’s Strategy Strategy is a plan of action that channels an organisations resources so that it can effectively differentiate itself from competitors and accomplish unique and viable goals. (cavusgil‚ knight‚‚ 2008) McDonald’s brand mission is to be customers’ favorite place and way to eat and drink. In order to achieve this‚ its global operations are aligned to work for a “Plan to Win” strategy which entails the 4 Ps – People‚ Products‚ Place‚ Price and Promotion. http://www.aboutmcdonalds
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