...makes me feel that if I spend time on looking for coupons and promotions, I can get those products at a lower price. I think I can pay less to get the same value, or get a higher value than what I pay by coupons and promotions. 2. Ron Johnson had a successful track record at Target and Apple. Are the questions around his new pricing strategy for Penney premature? JC Penney is trying to find a customer segment that is not entirely focused on price and deliver a different experience to them. But the problem is that JC Penney is currently a “me too” retailer, with nothing unique to offer. They are selling to a customer segment that is trained to look for the cheapest deal and their products don’t possess the differentiation to take consumer’s focus off its price. When selling a relatively undifferentiated product, it is hard to convince customers to pay more than what a lower priced competitor might offer. Differentiation is a key to avoiding steep discounts, and for JCP it seems pre-mature to offer lower prices when products are not differentiated. That differentiation can come from products or from the service in their stores. The “Town Square” concept is aimed at achieving just this – create an experience that no other retailer provides. But that’s still a few years out. CEO, Ron Johnson is a former Apple executive who played a big role in the success of the Apple Stores. Applying the same principles will not work here as JCP neither has the product differentiation nor the...
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...marketing though, it was also interesting while still being entertaining as well. The situations it presented were realistic, while not being so overcomplicated that the material it was trying to present got lost. In the following paper I will discuss the situations from the simulation, the relationship between differentiation and positioning especially with regards to the product in the simulation, and the effect of the product life cycle on marketing again focusing on its relationship to the simulation product. Situations The first situation the simulation provided me with was a successful brand that is facing declining sales. My recommendation was to focus on Lifestyle, Quality Engineering, Coolness and Price. My results from this were good, but could have been better if instead of focusing on coolness, I'd chosen to focus on service instead. This would have allowed me to optimally position the product. The second situation was to decide on a marketing plan moving forward for Thorr motorcycles. I chose to launch a new motorcycle, the RRoth, rather that reposition CruiserThorr. I chose this because CruiserThorr is already well positioned, and to change its price or other attributes would more likely confuse customers than help to grow the brand. Furthermore, the simulation had stated that the younger market segment of motorcycle customers had been ignored by Thorr, so I hoped to capture a share of that younger demographic with the launch of a new, more affordable motorcycle...
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...Foundations of Strategy Question 1: Nash equilibrium is a fundamental concept in theory of games and the most widely used method of predicting the outcome of a strategic interaction in the social sciences. It contains following 3 elements: * A set of players * A set of actions * A payoff function for each player A pure Nash Equilibrium is an action profile with the property that no single player can obtain a higher payoff by deviating unilaterally from this profile. Consider a game involving two each with two available actions. If the pick different actions they each get a payoff of 0. If they choose A they each get 2, and if they choose B they get 1. | A | B | A | (2,2) | (0,0) | B | (0,0) | (2,2) | The action (B,B) is an equilibrium since a unilateral deviation to A by any player would result in a lower payoff for the deviating player. (A,A) is also an equilibrium. The prisoners dilemma has a similar matrix. Each player improves his own situation by switching from “cooperating” to “defecting” only by knowing that the other players best option is to defect as well. In this case there is only one Nash Equlibrium, with both players choosing to defect. | cooperate | defect | cooperate | (4,4) | (0,5) | defect | (5,0) | (3,3) | Question 2: Coordination within the firm is practiced when managers and other members of an organization take up the roles that they have previously contracted to take up in the legitimate system of their organization...
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...DIFFERENTIATION-It is one of the generic marketing strategy approach under which a firm aims to develop and market unique products for different customer segments A firm differentiates itself from its competitors “when it provides something unique that is valuable to buyers beyond simply offering a low price.” Every firm has opportunities for differentiating its offering to customers, although the range of differentiation opportunities depends on the characteristics of the product. An automobile or a restaurant offers greater potential for differentiation than standardized products such as cement, wheat, or computer memory chips. These latter products are called “commodities” precisely because they lack physical differentiation. Yet, even commodity products can be differentiated in ways that create customer value: “Anything can be turned into a value-added product or service for a well-defined or newly created market,” Analyzing differentiation requires looking at both the firm (the supply side) and its customers (the demand side). While supply-side analysis identifies the firm’s potential to create uniqueness, the critical issue is whether such differentiation creates value for customers, and whether the value created exceeds the cost of the differentiation. By understanding what customers want, how they choose, and what motivates them, we can identify opportunities for profitable differentiation. Differentiation strategies are not about pursuing uniqueness for the sake of being...
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...2 INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (2 ICBER 2011) PROCEEDING nd nd THE APPLICATION OF COST, DIFFERENTIATION AND HYBRID STRATEGY IN BUSINESS OPERATIONS: WILL HYBRID STRATEGY BECOME THE NEW COMPETITIVE STRATEGY? Mas Bambang Baroto, 2Muhammad Madi Bin Abdullah International Business School (IBS), Universiti Teknologi Malaysia International Campus, Kuala Lumpur, Malaysia E-mail: 1mbbaroto@ic.utm.my (Corresponding Author), 2muhdmadi@ic.utm.my 1 ABSTRACT Both strategic management researchers and practitioners have realized the importance of the cost, differentiation and combination strategies for effective organizational performance and excellence. Recently, many large business companies in different part of the world have been applying both strategies (hybrid strategy) at the same time, rather than applying a single strategy at one period of time. The implementations of those three strategies are commonly used by the big giant companies where their business operations level is ranging from domestic, regional, international and global. Thus, the principal aim of this paper is to explore the application of these three strategies (cost strategy, differentiation strategy, and hybrid strategy) in various business companies. Keywords: Cost leadership strategy, differentiation strategy, single strategy, hybrid strategy INTRODUCTION In the competitive market, certain industries are having very heavy competitive rivalry among the company players. The...
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...What Is Product Differentiation? With brands of late multiplying like rabbits, with their pheromones let loose, the market has become a me-too place - too many brands claiming the same features and attributes and therefore inevitably leading to a blurring of benefits.In other words, there is, sad to say, very little or no product differentiation. To make matters worse, Product Line extensions ,variants and SKU’s,have added to the on-going hyper confusion, leaving the average consumer totally bewildered or on the brink of going bananas. In this crazy, hazy world of brands, does it make sense for a businessman to enter and compete with a horde of others who are more or less offering the same product or service? Conventional wisdom would say no. But, tarry a while. There are some supposedly smart cookies who outwit the system by successfully selling products and services that already exist in that market place and laughing all the way to the bank. How do they do it? Simply by engineering a perfect product differentiation. Product differentiation is a specific kind of business and marketing strategy. It focuses on a target market in which competitors already offer similar products or services. A company that uses product differentiation tries to create the perception among certain target customers that the company’s version of this product or service is some way or the other different from competing brands and thus has added value not available in competing brands...
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...replicated. Sources of competitive advantage: Competitive advantage Competitive advantage Similar products at lower price Differentiation advantage Differentiation advantage Price premium from unique products Competitors’ gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The strategies relate to the extent to which the scope of a business' activities are narrow versus broad and the extent to which a business seeks to differentiate its products. Question 3: The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry. Cost leadership With this strategy, the objective is to become the lowest-cost producer in the industry. The traditional method to achieve this objective is to produce on a large scale which enables the business to exploit economies of scale. Why is cost leadership potentially so important? Many (perhaps all) market segments in the industry are supplied with the emphasis placed on minimising costs. If the achieved selling price can at least equal (or near) the average for the market, then the lowest-cost producer will...
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...Introduction Branding is « the process of creating a relationship or a connection between a company's product and emotional perception of the customer for the purpose of generation segregation among competition and building loyalty among customers »(Hislop, 2001). Therefore, this relationship has to be built in order to get loyalty and to create differentiation. Indeed, achieving differention for a brand is one of the keys to success. More precisely, in the retail industry, branding is an effective tool to stores to differentiate from one another because it will allow a store to get its target market to choose it over its competitors by providing a unique value to its customers. That is the reason why buyers must considerate branding in their decision-making process. To illustrate this perspective, the results of an interview with a store buyer will be given thereafter. A brand, as defined by the American Marketing Association, is « a name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers ». Its goal is to convey a clear message to customers about its products to create credibility about the fact that they will meet customers’ needs and expectation so they will buy them. Building a valuable brand involves identifying accurately these requirements in order to define what to offer, how to offer it in a different and better way and what are...
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...competition, extent of product differentiation, and ease of entry into and exit from the market”, with the four basic structures being Pure monopoly, perfect competition, oligopoly, and monopolistic competition. The key learning objectives for the week showed us what pricing strategies to meet goals, such as competition strategies or loss leader where the company cuts the price of items to get customers to shop more. It also showed us way companies can create non price barriers based on market structure like loyalty cards and branding of products. Price-quality and features are ways to increase product differentiation based on market structure, and energy cost to vendor ownership are ways to reduce costs for an organization. The most comprehendible concept of the week was the four basic market structures. Monopoly is the easiest of the concepts to comprehend because most companies in the US are a part of the monopolistic competition. Most of the products we consume are produced and sold by a large amount of producers and purchased by a large amount of consumers. Take the chip industry for example; there are variations of cheese nacho chips by a large number of companies. Doritos, Great Value and Lays all have their own version of this chip as well as a variety of others and consumers purchase them based on what they like. The prices vary based on a variety of things from season to store of purchase. The most challenging concepts for me this week are the marginal revenue...
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...behind it. Within this course my team members Kristijan, Yaniv, George and me (Team KUGY) had the opportunity to apply our academic and theoretical understanding and knowledge in an online business simulation game, wherein we created our own car business and competed on the European car market fictionally. This paper aims to elucidate the advance of our strategic decision-making, observes the reasoning behind it and examines the following implementation of our approach. Founded on the definition of strategy being “A plan of action designed to achieve a long-term or overall aim”, we questioned ourselves in the commencement of the game what our strategy would be (Andrews, 2010). Subsequently, after considering the theories studied in class we decided that we needed to express our own and coherent strategy in less than 40 words, fitting to the restrictions objective, advantage and scope (Tregoe, Zimmerman, Schuster, 2008). “Attaining maximised profitability by carefully trying to get to know our customers’ needs, consequently adapting our products to suit their expectations to an extent where we would stop serving and start appreciating, so as to charge a premium price” (Yaniv, George, Kristijan and Ugo). The theoretical model we chose to establish our strategy was Porter’s generic strategy, that led us to a differentiation-focused strategy. Given to Porter, a competitive strategy is about differentiation (Andrews, 2010). Thus we thought that we should differentiate our business...
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...purchase pizza from locally owned to national chains therefore the threat of substitutes is high. • Bargaining power of buyers o With the multiple outlets available for consumers the bargaining power of buyers is high because if prices are too high they will shop elsewhere. o Additionally, many consumers switch between pizza restaurants because they choose the outlet with the best coupon. • Bargaining power of suppliers o The bargaining power of suppliers is low for the nationally owned pizza restaurants so they can demand lower prices. o The bargaining power of suppliers for locally owned pizza restaurants is high because they do not buy in large quantities. • All things considered, Porter‟s Five Forces are high so the industry may not be as profitable or attractive. However, in any case, the techniques implemented by successful, market players after provide them with an opportunity to leverage their business processes and compete favorably in the business. Since the establishment of Papa John's International, the company has grown up from a small pizza shop selling Pizza to tavern's customers to an international establishment having franchisees in key international arena. All this are as a result of well though differentiation strategy, thanks to the visionary leadership of John Schnatter. Papa...
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...University Submission Date: February 26, 2011 Letter of Transmittal February 26, 2011 To Md. Shahin Ahamed Chowdhury Lecturer Department of Business Administration Dhaka International University Dear Sir, It is my pleasure to hand you the Internship Paper for PARTEX Furniture Indus. Ltd. The Subject of my analysis is Partex Furniture, one of the concerns of the Partex Group- a renowned national conglomerate. The study encompassed, a through analysis of Problem and Pattern of Partex Furniture. I have completed my analysis of the current situation with recommendation that is believed to be fruitful for the concern of the conglomerate. I would like to thank you for providing me with the opportunity to conduct a study such as this, which help me to gain a deep insight into the activities of the business in complement with the theoretical knowledge provided by Md. Shahin Ahamed Chowdhury. I hope that you enjoy reviewing this report as much as I have enjoyed doing it. Sincerely Md. Ershadul Haque Roll No: 11 Regn. No: 209181 Major in Marketing Dhaka International University This...
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...provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Diagram of Porter's 5 Forces | SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry | | THREAT OF NEW ENTRANTS Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products | | THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to substitute -Price-performance trade-off of substitutes | | BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives | DEGREE OF RIVALRY -Exit barriers -Industry concentration -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes | I. Rivalry In the...
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...University Submission Date: February 26, 2011 Letter of Transmittal February 26, 2011 To Md. Shahin Ahamed Chowdhury Lecturer Department of Business Administration Dhaka International University Dear Sir, It is my pleasure to hand you the Internship Paper for PARTEX Furniture Indus. Ltd. The Subject of my analysis is Partex Furniture, one of the concerns of the Partex Group- a renowned national conglomerate. The study encompassed, a through analysis of Problem and Pattern of Partex Furniture. I have completed my analysis of the current situation with recommendation that is believed to be fruitful for the concern of the conglomerate. I would like to thank you for providing me with the opportunity to conduct a study such as this, which help me to gain a deep insight into the activities of the business in complement with the theoretical knowledge provided by Md. Shahin Ahamed Chowdhury. I hope that you enjoy reviewing this report as much as I have enjoyed doing it. Sincerely Md. Ershadul Haque Roll No: 11 Regn. No: 209181 Major in Marketing Dhaka International University This is to certify that Md. Ershadul Haque a student of MBA, Dhaka International University, Class Roll No:11, successfully completed his “Internship Program” entitled “Marketing Strategy of Partex Furniture” Special...
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...BUSINESS ADMINISTRATION APPROVED BY UNIVERSIDAD DEL ROSARIO – FACULTAD DE ADMINISTRACION TUTOR: TIDIANE AW INSTITUTION: ÉCOLE INTERNATIONALE DE MONTPELLIER FRANCE, MONTPELLIER, MAY OF 2009 DEDICATION I dedicate this dissertation to every person that has allowed it to be possible with the critics, to the teachers and tutors that have awaked in me the interest in this topic and also the passion for the businesses strategy, to my family that has always supported me to achieve my goals and to develop myself as a human being and also as a professional, and finally but not less important to Gabriel that has been a huge support to bring this dissertation to a satisafactory end. ACKNOWLEDGEMENTS This thesis would not have been possible without the generous assistance of the following individuals: To my parents and family, who strongly supported me when I decided to take up my profession, for encouraging me to carry on and overcome many obstacles and to stand up in front of challenges, in order to reach my goal. Special thanks for them. Special acknowledgements to my teachers and tutors, who encouraged me to be rigourous when learning and researching, and who...
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