Cost Leadership Strategy: Tata Steel And Corus Dequisition

The three main competitive strategies are cost leadership, differentiation, and price strategy. Cost leadership focuses on acquiring raw material of the highest quality at the lowest price. In return this company can lower production cost with the goal of being the company with the lowest production cost in the industry. Differentiation strategies allow companies to make their products stand out from the others. Differentiation can be actual or perceived. Actual differentiation occurs when the company creates products that are not available elsewhere. Perceived differentiation takes a lot of marketing and advertisement to convince the consumer that this company’s product is superior. Price strategy includes a variety of strategies that cause a particular product to be marketed at the lowest price possible. Price strategy includes skimming where companies set a high initial price only to turn around and lower it. Bundle pricing occurs when several products are offered for one price. Promotional pricing allows other incentives to buy such as buy one get one half off. Using the pricing strategies causes many consumers to actually purchase more believing that they are receiving a “deal” while the company is still profiting. Competitive strategies are always used by companies and are often used together. Companies that understand how to combine competitive strategies fare much

Differentiation strategy is generally reserved for companies with a clear competitive advantage. Companies such as Mercedes and Apple employ this strategy. Differentiation strategy is demonstrated when a company provides value to customers through unique unique features and characteristics of a company's products rather than by the lowest price (Open Learning World 2010).

Firms have five different levels of strategies that they can establish to protect themselves from their competition. The five levels include: cost leadership, differentiation, focused cost leadership, focused differentiation, and integrated cost leadership/differentiation (Hitt, M. A., Ireland, R. D., & Hoskisson, R. E., Page 108 (2013). Each one of these levels has their own characteristics.

Differentiation and cost leadership were two strategies chose because they are the most common between the different companies. Amazingly two leading organizations from different industries are using the same competitive strategies and tactics. The two competitive strategies may be the reason both organizations are leading within their industries. Differentiation is a type of competitive strategy with which the organization seeks to distinguish its products or services from competitors (Valdehueza, 2009).

Tata Steel acquired Corus Group in April 2007 for £6.2bn. Tata Steel is India’s largest private sector steel company with 2005/06 revenues of US$5.0 billion and crude steel production of 5.3 million tons across India and South-East Asia. Corus Group is Europe's second largest steel producer with annual revenues of over £9.2 billion and a crude steel production of 18.2 million tons in 2005. This is an interesting acquisition as the acquired company was almost four times the size of the acquirer in terms of revenue. The combined entity became the fifth largest steel company in the world. The acquisition allowed Tata Steel entry into the European market. This deal follows the merger of Arcelor-Mittal forming world’s largest steel company. It is the biggest deal ever from an emerging market. The deal is a powerful combination of low cost upstream production in India with the high end downstream processing facilities of Corus. The deal occurred through 9 rounds of competitive bidding between Tata Steel and

It is also known as what firm has to gain over its rivals. This arises from the use of generic strategy that best fits into the organizations competitive environment. The key drivers of competitive advantage is the cost leadership and differentiation product. Competitive strategy is the means by which the organization seek to achieve and sustain competitive advantage. Porters identified the four strategies to achieve competitive advantage.

The purpose of this writing is to explain the cost/price leadership strategy of a company that has established a strong base in spite of facing competition from various established brands. The company’s focus strategies as well various aspects of strategy clock such as economies of scale is explained. It talks about the key resources the company employs in this cost leadership strategy to cover the market segment, the threats it faces in the foreseeable future with regard to the market share, price and innovation. Also, the counter measures applied by the company in order to counter balance the opportunities, threats and maintaining sustainability.

In the case of Boeing, differentiation strategy of the company. This strategy, integrated set of actions to produce goods or services (fee received) are regarded as different customers in a way that is important to them.

The main objective from this strategy is trying to reduce production cost so the business can offer lower prices and remain competitive. To achieve this strategy businesses try to mass

First, we need to know, what is Cost Leadership Strategy? Cost leadership strategy is primarily to gain an advantage over competitors by reducing its cost. Cost of leadership is a strategy used by businesses to create a low cost of operation within the situation. Cost Leadership Strategies is one of the best strategies among the other Porter’s other strategies. This strategy supports the business to improvement in the market portion by putting lower price in judgement to other competitors. This plan is probable by only putting cost price lower. Businesses can put on diverse means to place their cost price less in estimation to other competitors. In evolving recruitment model, business must be price conscious. To save some money the business must hire the employees at the minimum wage and hope that they stay around after the trainings to avoid having to train increasingly, which can be

conversely; cost leadership often requiresa firm to forego some differentiation by standardising the product, reducing marketing

The goal of a cost-leadership strategy is to reduce the firm’s cost below that of its competitors. The cost leader, as the name implies, focuses its attention and resources on reducing the cost at which it is able to offer a product or service (and still make a profit in the long term). The cost leader optimizes all of its value chain activities to achieve a low-cost position. Although staking out the lowest-cost position in the industry is the overriding strategic objective, a cost leader still needs to offer products and services of acceptable value.

Competitive advantages are created in several forms; differentiation, low costs or both. Differentiation refers to products or services with a perceived higher quality, fewer risks and outperforms competitor products. Differentiation strategies include cost leadership, customer experience,

STRATEGY In our five year plan we decided to use the Differentiation strategy, Differentiation involves providing a product or service with higher perceived value than its competitors (Scholes el al,

In the late twentieth century, demand growth was strongly low. In contrast, the twenty –first century saw a boom in demand. For instance, Tata bought weaker players internationally, such as NatSteel in 2004, which was Tata Steel’s first overseas acquisition, and the Anglo – Dutch giant Corus in April 2007. Through the investment in Corus, Tata has created a manufacturing and marketing network in Europe, South East Asia and the pacific – rim countries. These acquisitions were also the result of using a strategy of