Blockbuster implemented a new strategy for customers to access their rentals in “five channels of distribution: in-store, by mail, through vending machines and kiosks, online, and at home (direct to the TV)” (DATAMONITOR, 2009). However, this strategy was a reactive approach to the problem produced ten years behind schedule. Wooldridge et al., (2007) stated that Blockbuster should select and adapt their strategy to respond to the fast changing market and maintain a competitive position. This was an obvious failure for Blockbuster. The changes in the market produced a decline in profit at a faster pace than the strategies that Blockbuster implemented to combat these losses.
Our team decided to choose the “Broad Differentiation” strategy as the basic strategy for our company. We will attempt to differentiate our product line in several distinct dimensions. By providing products that are vastly superior and unique from our competitors and pricing the products with an affordable price, we can gain something that is beneficial for the company in the future, which is customers’ loyalty and awareness. We may change or modify our strategy for the next round depending how it performs against our competitors.
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).
Low product differentiation and economies of scale: There isn’t much product differentiation at play in the retail industry as there are well known manufacturers whose products are offered for sale, which leaves price to compete on. Current well established retailers with thousands of stores enjoy the economies of scale to control their cost that a new entrant might not be able to replicate after immediately entering the industry.
As the world has gotten “smaller” in terms of trade, outsourcing has become a hot topic in much political and economic debate in the United States.
I chose a multi-regional, focused differentiation strategy tailored to match the differing competitive conditions and actions of rivals in the North America, Europe-Africa, Asia-Pacific, and Latin America regions. In years 11 through 16, my strategy focused on “upscale buyers wanting products…with world class attributes.” (Thompson, Peteraf, Gamble, & Strickland, 2012) I chose this strategy because the cultures represented in my demographic are radically different, thus I believed we needed a strategy that catered to those differences. This focused strategy concentrates on
For now, Redbox is in a position to fulfill the demands of the consumer, however Redbox must keep a vigilant eye on the trends of the consumer as the market shifts from physical to digital movie rentals. 3. 3. What strategic issues or problems does Redbox management need to address? Draw upon the discussion on p. 87 in Chapter 4 to develop your “worry list” and to state the issues/problems in the
In differentiation strategies, the emphasis is on creating value through sustainable uniqueness. This can be achieved through product innovations, superior quality, or superior service, which is then sustained and leveraged through creative advertising; brand-building and strong supply chain relationships. Another requirement for a successful differentiation strategy is that customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create it. A differentiation strategy will lead to higher firm performance only if buyers value the attributes that make a product or service unique enough to pay a higher price for it or if they choose to buy from that firm preferentially. If
Differentiation can be achieved in a variety of ways: unusual features, responsive customer service, rapid product innovations, technological leadership, perceived prestige and status, appeal to different tastes, and engineering design and performance. Methods of controlling costs, however, may be limited. The ability to price differentiated products competitively will be important for reducing upward pressure on customer prices so that they do not exceed the level customers are willing to
The shifts in the jeans manufacturer Levi Strauss’s global strategy could vividly demonstrate how global sourcing strategy works and affect its supply chain. At first, the company was created in the USA. As it developed and became a global company, they began to employ workers all over the world. However, in face of fierce competition, Levi Strauss started to shift its operation to lower-cost countries in the late 1980s. By the year 2003, Levi Strauss closed the last four plants in North American and ‘has become an entirely offshore producer’ (Dicken 2011 p.318). The German fashion company Hugo Boss also provides similar example. In face of high production cost, namely high labor cost in domestic market, more and more fashion retailers choose to outsource their production. Moreover, some fast
While playing the BSG I found the best strategy was the best-cost provider strategy. Using the best-cost strategy allowed me to continue using a decent amount of superior material while also offering prices that were below or around the same price as my competitors. My shoes where not the highest quality or most expensive, but it was also made with a small amount of superior material so it was also not the cheapest made shoe available. This strategy worked best because it attracted buyers who wanted a good quality shoe but did not want to pay high quality prices. Since there were so many companies offering the same product, offering a medium-quality product at a lower price helped my company to gain more customers and market share. A focused differentiation strategy worked least well. Concentrating on one niche results in a company missing out on potential customers. Competitors working outside of the niche will eventually find ways to match the firm’s capabilities in serving the target niche. If the wants and needs of the target market start to switch over time, entry into the focused market can become easier for competitors as people look for different products and services.
With differentiation strategy, it states the product or service which provided by enterprise should have uniqueness, which means enterprise can gain competitive advantage through satisfy consumer with their special needs. (Johnson, 2013) Therefore, according to this and the information in the case, it can be seen that Adnams conducts the strategy to produce unique product and service to gain competitive advantage, and Adnams receive many benefits from it. Moreover, the key function of differentiation is that it can help Adnams establish the customer loyalty to itself. Besides, it also forms a strong industry barrier to entry, which means it can limit the quantity of competitors, and make other competitors more difficult to share the market with Adnams. In addition, the actual operation of Adnams in differentiation strategy will be analysed in several
Differentiation: In Differentiation strategy, a company ‘s goal is to create uniquely desirable products and service, that are different and more attractive than their competitors. It is rewarded for its uniqueness with a premium price.
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