Fist And Cost Leadership Strategy: Micromax '

Cost leadership is also an important key to success in any commodity industry since it is one of few areas where any true profit can be squeezed out of markets defined by undifferentiated products. ADM’s vertical integration

Cost leadership (Johnson et al., 2013, p194) strategy involves becoming the lowest-cost organisation in a domain of activity. In this case, NiMH battery prices were reduced to remain competitive in the market considering the fact that NiMH batteries represented the Cash Cow of the company.

There are many strategies that organizations can incorporate in today’s business environment. An organization can decide to take on a low-cost provider strategy, a focused low-cost strategy, broad differentiation strategy, focused differentiation strategy, and/or a best-cost provider strategy. While all of them have their own unique features and can offer a competitive advantage over its rivals, Competitive Shoes, Inc. decided to incorporate the best-cost strategy into its organization in order to compete against it rivals. By incorporating the best-cost strategy into its organization, Competitive Shoes Inc. felt that they could stay

Cost has traditionally being a major influence on all business as all businesses desire to achieve maximum efficiency as it is a vital factor for businesses in order to reach the ultimate goal and success. Businesses sees cost as the key value to success and aims to become as much cost efficient as possible, by implementing a cost-leadership style approach to the operations variable cost or fixed cost ,while maintain the expected profit margin, business is able to gain a competitive advantage over their competitors in their target market. This is called cost-based competition. By determining the break-even point and applying cost saving strategies, to reducing cost, businesses who apply cost-based competition in their operations is able to maximize the profits and lead business to success.

A cost leadership strategy focuses primarily on “producing products and/or services that are the lowest in the industry” (Turban, Rainer, & Potter, 2003). This type of organization forms business alliances that support their inventory management through computers and computerized purchasing. A differentiation strategy focuses on being unique within the industry and provides high-quality products at a competitive price (Turban, Rainer, & Potter, 2003). These types of companies “provide their customers with a

Kudler needs to find a way to know the business of its supplier or its distributors, so as to reduce cost and the uncertainty that comes with doing business with them. In doing so, they stand a better of surviving at long run in the market they intend to dominate-one stop shop. Kudler need to employ the porter 's model so as to be competitive. Kudler needs to analyze the threat of new competitors, the bargaining power of suppliers, the bargaining of its customers, threat of substitute product or services and rivalry among existing firms in the industry (Turban 2003). From the products they offer, they have incorporated the bargaining power of customers into consideration and providing substitutes in the same product line. The business level strategy should be a mix of cost-leadership strategy with differentiation strategy built in. In doing so, they are positioned to always increase their earnings. In cost leadership, it requires firm to carry out its activities more efficiently than competitors, passing some of the cost savings to consumers in the form of lower prices (Gomez-Mejia 2002). A differentiation strategy requires a firm to continuously invest in the creation of new products or add new features to existing products so that customers believe the products differ from those of

Integrating strategy and managerial characteristics suggests that when comparing market leaders and cost leaders, the market leader should be higher in all of the following EXCEPT

Riordan’s organization sells heart valves, plastic bottles, fans, and medical stents. Clearly, Riordan has a large variety of products. Organizations use a competitive strategy with cost leadership, which seeks tight cost controls. Cost controls pursue efficient ways to cut cost and be more efficient than the competition. Decreasing business costs every way

2/13/2017: Broad cost leader strategy is chosen by the team. The strategy’s impact on marketing to keep low costs and maintaining competitive pricing were discussed.

In other words, customers are willing to purchase low-tech products as long as their prices are relatively low. As a result, Niche Cost Leadership seems to be the most appropriate strategy for these two segments.

According to Survey by national consumer organization, CHOICE (2014), a comparable basket of goods at ALDI is 25% cheaper than at one of the MSCs. ALDI is estimated to hold 9.1% market share in 2015-16 as compared to other grocery stores (ibis). In terms of the strategy of ALDI, ALDI focus on reducing costs to the customer in such a manner that customer is convinced to continue shopping. However, on further analysis, the organization illustrates a differentiating strategy and prefers to distinguish itself from other major retailers the likes of Coles, Wesfarmers and Woolworths. For example, ALDI provides weekly specials like on gardening, camping, kids, and kitchen with discounted offers. ALDI is a low-cost player that stocks a less variety of popular grocery items. Over past five years, an incredible achievement contributes to ALDI 's rapid growth to which consumers have responded positively (ibis). Therefore, it can be said that in terms or corporate strategy, the organization has characteristics of both a cost leadership strategy as well as a differentiation strategy.

DigiMaxConhas adopted cost leadership strategy of manufacturing since its establishment. The company has been designing products that can compete in market on the basis of their price. Company has invested a lot to improve its processes and production in order to achieve extreme cost economy. Later on, the decreasing profit margin has

There are also some risks for each strategy. Upholding cost leadership can be risky because of the requirement of frequent capital investment to sustain cost advantage, then cost surges narrow price differentials and diminish ability to compete with other’s brand royalty. Differentiation strategy has some threats, such as imitation decreases alleged differentiation, buyers need for differentiation falls. Meanwhile, the risks for focus or niche strategy are the differences in preferred products or services between the strategic market and target as a whole narrows, the cost discrepancy between wide ranged competitors and the focused firms broadens to eradicate the cost advantages of allocating a narrow target or to offset the

To comply with the cost-leader competitive strategy of Digby, we lower the MTBF, improve automation and enlarge economies of scale to reduce material and labour variable costs. By that, we are able to entitle a higher contribution margin. Only focusing on costs, we miss the nature of competitive strategy. Porter (1997) suggests cost leadership competitive strategy allows sufficient price flexibility to those price-sensitive segments- Traditional and Low End. It is acknowledged that price and demand has a negative correlation (Marshall 1920). A drop in price of a product lower than its competitors can boost customer demand for the product. However in practice, we fail to lower our price and this Though we did generate large profit from these high contribution margin segments, Digby on one side violates the nature of cost leadership competitive strategy, and on the other side fails to maintain our competitive advantages to actually dominate the market. This is the reason for our loss of market share in Traditional segment in round 6. Compared to price variation in Traditional in 2020, nearly all businesses set a similar price in 2021, and we lose 12 % of market share (Digby 2020-2021). If we realise the strategy violation and arrange the price competitively early, we may award larger market share to dominate the market and gain the monopoly power.

A successful cost leadership strategy usually provides the entire firm with high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, and wide span of control efforts. However, some risks of pursuing this strategy are that competitors might imitate the strategy, thus, driving overall industry profits down; that technology breakthroughs in the industry may make the strategy ineffective; or that buyer’s interest may swing to other differentiating features besides price.