Questions On A Broad Generic Business Strategy

1752 WordsJan 29, 20168 Pages
Discussion Question 6.1 What are some drawbacks and risks to a broad generic business strategy? To a focused strategy? Three specific drawbacks to adopting a broad generic business strategy are steep cost, inflexibility to change, and inability to meet specific customer needs. A broad business strategy requires a company to incur significant cost to make sure that the entire market it is trying to reach it informed of the product or service it is providing. These cost will include things such as high levels of merchandising, marketing, and sales staff. Inflexibility to change is a real drawback of a broad strategy because the company will be so entrenched in its current strategy of manufacturing, marketing, or selling its products in a certain manner that it will be very costly for the company to make changes in the future. An example of this can be seen in the length of time that it took large retail companies to create their internet presence in response to Amazon’s explosive growth. Lastly, a broad strategy can lead to an inability to meet customers’ needs because the company is seeking to provide its products to a wide range of consumers. Adopting a broad business strategy, whether cost leadership or differentiation, does not allow the company to meet the slightly differing needs of the different consumer groups that purchase its product or service. Two specific drawbacks to a focused business strategy are inability to grow market share and niche disappearance. If a
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