ORIGINAL RESPONSE only
Respond to the following 4 discussions. DONT BE TOO NEGATIVE on your criticism or I will need to reassign this assignment to someone else. Give scholarly criticism. Minimum 150 words on EACH DISCUSSION.
The question that each discussion is answering to is as follow: Research a company that exercises one of the four strategies. The four generic business-level strategies discussed in Mastering Strategic Management (2014) are cost leadership, focused cost leadership, differentiation, and focused differentiation Explain how the organization operationalizes the strategy. Attach the article (ensure the link works) as part of the reference.
1.
[In] Chapter 5 of Mastering Strategic Management, four generic strategies are outlined! Research a company that exercises one of the four strategies. Explain how the organization operationalizes the strategy. Attach the article (ensure the link works) as part of the reference.
The four generic business-level strategies discussed in Mastering Strategic Management (2014) are cost leadership, focused cost leadership, differentiation, and focused differentiation (Unknown, 2014, p. 140). Each of these strategies requires a different level of effort and attention from different elements of the enterprise. For example, a company whose strategic focus is on cost leadership might focus more on buying large quantities of a narrow selection of goods while paying little attention to marketing. On the other hand, a company that is focused on differentiation would likely put much more effort into marketing their product in order to find and inform its target market (Unknown, 2014, p. 140).
Of the four strategies, this response discusses focused differentiation, which has been defined as a "strategy [that] requires offering unique features that fulfill the demands of a narrow market" (Unknown, 2014, p. 159). This narrow market can be anything from a particular selling method (e.g. online only), a singular product (e.g. buggy whips), or a particular demographic (e.g. college-age males).*
Shoe maker Adidas (Nasdaq:ADDYY) sells a line of shoes designed by Kanye West called Yeezy Boost (Adidas, n.d., para. 2). These shoes are targeted at those people who are willing and able to spend a few hundred to a few thousand dollars for a pair of celebrity-designed sneakers. They are differentiated by price, scarcity (Adidas only releases a limited number of shoes for each version), and the touch of celebrity associated with West's name (Alvarez, 2016, para. 1).
It is so difficult to buy a pair of Yeezys when they become available that an entire cottage industry exists for reselling them at prices up to $2,000 (Alvarez, 2016, para. 1). For example, currently on eBay one can find a part of Yeezy Boost 750 sneakers with an asking price of $1850. The seller even offers financing (eBay, n.d., para. 1). Walmart sells a pair of Yeezy Boost 350 sneakers for just over $1500 (Walmart, n.d., para. 1).
This, of course, is a deliberate strategy on the part of Adidas. While the company acknowledges that it could produce large numbers of the shoes to keep them from selling out as fast, it has made the strategic decision to keep supply lagging demand in order to raise awareness and desire for the product (Alvarez, 2016, para. 12). By offering a unique product aimed at a specific, relatively narrow market, Adidas is clearly following the strategy of focused differentiation.
* While not the subject of this discussion because they are really only a marketing gimmick, Pizza Hut (NYSE:YUM) recently announced a very limited run of what it calls "Pie Top" sneakers that utilizes each of these market types. With a pair of these shoes, one can order a pizza simply by pressing a button on the tongue of the shoe. Voila! Internet ordering, singular product, and college-age males: All markets hit by one product. In fairness it should be noted that these sneakers will not be available to the general public, as only 84 pair were made (Newcomb, 2017, para. 1-3). Even so, they are a good if extreme example of focused differentiation.
2.
1. Chapter 5 of Mastering Strategic Management, four generic strategies are outlined! Research a company that exercises one of the four strategies. Explain how the organization operationalizes the strategy. Attach the article (ensure the link works) as part of the reference.
In your response to your classmates' direct response to this question, peruse their article and respectfully critique oversights or omissions.
The four generic business-level strategies mentioned in our reading are: (1) cost leadership, (2) differentiation, (3) focused cost leadership, and (4) focused differentiation (Strategic Management, 2014).
The generic business-level strategy I chose is cost leadership. This strategy is used by some businesses to create a low cost of operation to gain an advantage over competitors by reducing operation costs below that of others in the same industry (BusinessDictionary, n.d.).
Cost Strategy does exercise its practices by emphasizing efficiency, and in an effort to be efficient, most cost leaders will spend little on advertising, market research, or research and development. Cost leaders are typically large companies (Strategic Management, 2014).
The company that practices this strategy is Ikea. Originating from Sweden, Ikea is a furniture retailer that revolutionized the furniture industry by offering cheap but stylish furniture. This company manages to sustain low prices by sourcing its products in low-wage countries and by providing a basic level of service. Although Ikea does not assemble or deliver furniture, customers are left to pick-up and assemble the furniture themselves. Though this practice is less convenient, it enables the company to offer lower prices (Scilly, n.d.). You can find more information about Ikea using the cost leadership generic business strategy in the following link: https://smallbusiness.chron.com/examples-cost-leadership-strategy-marketing-12259.html
3. Chapter 5 of Mastering Strategic Management, four generic strategies are outlined! Research a company that exercises one of the four strategies. Explain how the organization operationalizes the strategy. Attach the article (ensure the link works) as part of the reference.
In your response to your classmates' direct response to this LA, peruse their article and I expect a respectful critique of oversights or omissions.
Wal-Mart Stores Inc. has been very successful using the strategy of everyday low prices to attract customers. Instead of relying on sales, using their idea of everyday low prices offering items cheaper than their competitors do on a consistent basis has proven to be successful for Wal-Mart. Having an efficient supply chain enables Wal-Mart to accomplish this. Products are sourced from cheap domestic suppliers and low-wage foreign markets. This practice allows the company to sell their items at low prices while profiting off thin margins at high volumes. (Scilly, n.d.)
4. Ferrari epitomizes the focused differentiation strategy. Focused differentiation strategies have unique offerings for a target market (Mastering Strategic Management, 2014). Ferraris have racing pedigree, are some of the highest performance cars available, have iconic design language, exclusivity, are highly recognized and sought after, and are limited editions (Rahman, 2015).
Ferrari is a passionate emotion of homage to racing, ultimate performance, and luxury that doesn't compromise the essence of ultimate performance and drivability (Rahman, 2015). Ferraris are a unique driving and ownership experience, and their target market is affluent men with lots of disposable income the embody the spirit and tradition or competition, driving, and sport (Rahman, 2015).