1. Market Penetration requires increasing the existing product sales in the existing market. The main strategic objective is to obtain more market shares or get the position of market leader. As an example: Aldi followed the market penetration strategy by opening thousands of stores across UK offering the same products. 2. Product Development means to increase sales by improving or introducing a product which fulfils the demands of the market. For example: Coca Cola introduced Coke Zero, Coke Diet, to target the health conscious customers. 3. Market Development focuses on increasing the sales for an existent product by introducing it into new markets. This strategy is often used by the companies which plan to expand globally, by adding new …show more content…
In 1985, Harvard Business School Professor Michael Porter published his new book “The Competitive Advantage” which focuses the organisation internal environment. In this book, along with an in depth analysis of the competitive strategies which are Cost leadership, differentiation and Focus, he also concentrates on the firm’s value chain. 1. Cost Leadership: In cost leadership, an organisation aims to become the low cost provider in its industry. Examples are Aldi, Lidl, Ryan Air etc 2. Differentiation: In a differentiation strategy a firm seeks to be unique in its industry. KFC follows a differentiation strategy as the recipe for its products is very unique and never been imitated. 3. Focus: This strategy rests on the choice of a narrow competitive scope within an industry. The focus strategy has two components. (a) In cost focus, a firm seeks a cost advantage in niche market, (b) In differentiation focus; a firm seeks differentiation in its target segment. Examples are car manufacturers like Aston Martin, Rolls Royce, and Bentley. These companies target a niche market and manufacture the cars according to the customers required specifications. (Management technology policy, …show more content…
He emphasized that businesses should strive to achieve one of the generic strategies in order to achieve a competitive advantage but Henry Mintzberg disagreed with this idea and in 1994, came up with the concept of Emergent Strategy. He argued that the organisations with constantly changing business environments need to be flexible in order to benefit from various opportunities. In his article “The fall and rise of strategic planning” Mintzberg argues that strategic planning often spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers (Mintzberg, 1994). He adds “Strategic planning, as it has been practiced, has really been strategic programming, the articulation and elaboration of strategies, or visions, that already exists”. The author states the importance of ‘syntheses, drawing together various sources of information to create this direction. He further writes that Formal planning is always dependent on the conservation and reorganisation of established categories and the established types of products, overlaid on the current units of structure. But real strategic change requires not merely rearranging the established categories, but inventing new
By definition, marketing strategy is the design and implementation of a plan that combines elements of the marketing mix to accomplish the shorter term objectives of the organization consistent with the strategic marketing plan. I believe that Chick-fil-A did design and implement an effective marketing when they tried to target and fulfill their target customer’s need. By applying the concept 4Ps, product, place, price, promotion, chick-fil-A had its exclusive strategy. In the aspect of product, Chick-fil-A is an American fast food chain store based in Atlanta and mainly specializing in chicken sandwiches.
According to SNHU (2016), Michael Porter describes cost leadership, differentiation, or focus on a target market that ranges from narrow to broad are the generic strategies a company can pursue. A company can add unique values and differentiate from its competitor, or lower its production cost and passes on the savings to its customers or focus different market depending on its core competence to its own advantages while planning and designing a strategy. The factors that differentiate one competitive strategy from another depends, if the company follows a competitive advantage linking to lower cost or targeting a broad or narrow market. Two types of competition lower cost and differentiation, two types of the target market broad and narrow provided total 4 competitive strategies and the 5th the best-cost provider strategy is a blend of all the four (Thompson, Peteraf, Gamble, and Strickland, 2016).
Competitive Strategy of Eckerd According to Michael Porter, cost competitive leadership, product differentiation leadership, and focus leadership are strategies that are often used by companies. Companies choosing cost competitive leadership would focus more on cutting the cost to increase revenue. For those who select product differentiation leadership, how to make their product or service unique would become their question. And focus leadership means a company chooses to serve a specific range of customers or a specific product.
Creating a strategic plan makes it easier for people in the Riordan Manufacturing, to know what it produces, sells, its customers, and how it competes. The strategic plan will have a number of stages. The first one is contemplating the vision of Riordan Manufacturing. This stage identifies what the organization hopes to accomplish. It, therefore, involves strategic formulation of objectives and goals that the Riordan Manufacturing hopes to achieve in
By creating and maintaining a strategic plan, the company can reduce the majority of risks that may occur, any errors that may arise later on, and can protect the company of any issues that may affect the economy, which will in turn cause a problem with business. It has already been established that Riordan is leading the plastics manufacturing industry, which shows that their plan is working, and that they have the competitive advantage in the industry. Competitive
ROTHAERMEL EXERCISE 2 Discussion Question 6.1 Generic strategies are all three concepts that can be adopted by any firm. According to Michael Porter (1980), there are three generic strategy’s, Cost Leadership, Differentiation, and Focus. Differentiation involves the creativity of product used for some unconventional products. The drawbacks to the differentiation strategy are once the firm has a competitive advantage, the fair market value price of goods sold becomes too pricey, thus the resurrection of the smaller firms is reborn.
Some firms using a focused differentiation strategy concentrate their efforts on a particular sales channel, such as selling over the Internet
Costco is one of the largest retailers in the United States and its spread to other parts of the world. From its founding and first store opening in 1963, Costco has expanded internationally becoming the second largest retailer in the United States and Seventh in the world. The company success mainly depends on the Co-founder and CEO Jim Senegal’s business strategies. In many financial comparisons Costco beats its competitors through it is unique business operations, which is to keep the price of the items so low that other stores cannot compete, basically Jim Senegal pays more attention to costumers than competitors. The purpose of this case is to focus describe potential strategies that Costco can use to maintain its competitive strategies.
For this assignment, use no more than 1500 words, excluding titles, footnotes, charts, tables and annexes. I will not receive papers exceeding this limit. This paper accounts 25% of the final grade. Answer: Introduction Strategic management is challenging
In order to ensure that the company meets its target in gaining the required market share, the company should among other things, ensure that it carries out an effective market research to discover the market gaps and have an idea of the best points of entry. This should be coupled with an efficient sales force for product promotion and distribution. The company should also deploy cross-functional teams charged with making key manufacturing and marketing decisions to ensure synergy when it comes to product release. Another key, but often overlooked aspect is getting the required logistics in place early enough. With logistics, the focus should be on the involvement of logistics personnel in developing strategy both marketing and managerial.
D1 – EVALUATE THE EFFECTIVENESS OF THE USE OF TECHNIQUES IN MARKETING PRODUCTS IN ONE ORGANIZATION. I will now evaluate the effectiveness of the used in marketing products in Coffee House. MARKET PENETRATION - Coffee House use market penetration technique to market their products to existing target market. As the name suggest, Coffee House is a coffee house and they provide their product in cheap price. MARKET DEVELOPMENT - Coffee House does not yet use this technique.
a. The product and production orientation of marketing asserted that a company should first develop product and then they should scan the market for sale opportunities. Now days in the modern world the market have changes. The process orientation of marketing requires a company to first to analyse the market, understand customer requirement and then develop products. In todays world, the modern marketing is based on the reverse process, in which the first the customer needs and demands are identified. The subsequent market program of the firm depends on how the market identifies the potential customer, profiles them, target them and positions his offering in the minds of customer.
Much proof would indicate that Coca-Cola has definitely chosen a differentiation strategy since its early days. To prove this, a look will be taken into how it has being done. According to softdrinkcolar blogspot (2012:1), the company spends about 20% of their total advertisement budget for maintaining and communicating on its differentiation strategy. Coca-Cola has created differentiation using a soft sell approach and has positioned itself on the following standards: # Corporate reputation for quality and innovation: one of the best place to work-
Differentiation Strategy: - It includes developing new products & services which satisfies customer needs, they offer much more values than their competitors. They differentiated the segment according to the customers. They provide multiple customer segments which includes moderately priced to premium priced customers for example: 1. Bulgaria resorts & hotels (The Ritz Carlton) - Target segment:-Luxury guest. 2.
The price strategy which KFC is currently adopting is geographical pricing. It is because the menu prices is set differently in each country. For example, KFC Malaysia snack plate is priced at RM 5.95 while snack plate in Singapore is priced at SGD 6.40. Generally, they use market penetration pricing for new products. KFC sets their price slightly lower as compared to their competitors in order to entice customers away from their competitors.