Role Of Cost And Price Leadership For Tesco

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).

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.

(Aetna Inc., 2014, p.1) The statement best represents a differentiated strategy as clearly stated in the statement. Differentiation strategy is a strategy that focuses on value added ideas and being customer focused. They want to compete for years to come and in the health care market industry being competitive and making a profit is being able to provide to your customers superior products that they are willing to pay more for and usually cannot find anywhere

When pursing a differentiation strategy, the focus of competition is to add unique features in order to

The attached essay, “One Big Reason Costco is Getting Stronger”, was written for the assigned term paper in my Microeconomics course. The purpose of the assignment was to analyze a current business article as it related to topic of cost leadership. Evaluating this essay within assignment guidelines will allow me to understand how I can improve my writing skills. Utilizing the article, “1 Big Reason Costco is Getting Stronger”by Andres Cardenal, the essay addressed how Costco has become the cost leader in the discount retail industry. Sales statistics proved that since 2006, Costco revenues increased almost two-fold over its competitors, Wal-Mart and Target (Cardenal, 2014, p. 1).

Differentiation approach refers to the organizations unique designing creations. These approaches appeal to the customers who prefer upscale and exquisite specialty products or services. These include

In business, three major strategies comprising of cost leadership, differentiation, and focus strategies exist. The focus strategy emphasizes on providing services and products to a specified buyer group or market segment within a given geographic market. The differentiation approach is often defined as provision of services or products that are perceived to be unique in the market place. Wal-Mart emphasizes on the long-term strategy of cost leadership. Through this strategy, the company ensures that it offers customers with quality products at relatively lower prices than other providers in the industry. Through overall cost leadership strategy, Wal-Mart has been offering better quality products at a lower price than any competitor can offer. For the organization to achieve this goal, it has developed long-term supply chain management, which ensures that products are made available to the market at the required time (Enz, 2010).

Cost leader strategy; This strategy is to provide the customers with products and services that have a price point lower or at the same price that a competitor is willing to sale the same products and services at.(Kinicki & Williams, 2013) JCPenney has never claimed to be a retailer that is interested in being the lowest priced rival in retail sales game. Consequently, Mr. Johnson did not indicate in this case study that the Cost leader strategy would be a course JCPenny’s would take under his leadership.

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

ALDI, mainly target middle class people whose main factor in buying is low price for quality product, pursuing cost leadership strategy (Bonn, 2010). It is used to for reducing operations cost

Similarly, both companies had a product differentiation strategy, with the aim of being distinctly set apart from their competitors by the viewing market. However, different elements of this strategy were focused on by the firms. For instance,

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.

Another generic competitive strategy is broad differentiation strategies. According to Thompson, Strickland, and Gamble, in “Crafting and Executing Strategy”, broad differentiation strategy is seeking to differentiate the company’s product offering from rivals in ways that will appear to a brad spectrum of buyers. A company attempting to succeed through differentiation must study buyers’ needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for. Then the company has to incorporate buyer-desired attributes into its product or service offering

This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.