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¶ … organization specific approaches listed [Differentiation, Cost Leadership, and Response] (Figure 2.4 pages 38). Support position references specific actions, policies, events demonstrate opinion makes sense.
Porter generic strategies: Cost leadership, differentiation, response
Cost leadership
The organization that has most famously deployed a cost leadership approach to pricing is Wal-Mart. Wal-Mart's slogan is that it offers the lowest prices all of the time. Although some stores may occasionally offer deeper discounts on specific products, in general Wal-Mart offers the most consistently low prices of any 'big box' retailer. It does not necessarily offer the highest quality or even the greatest selection, but it is almost always the cheapest, compared with its major competitors. It is a large, general retailer and although its primary demographic may be lower-income customers, many consumers with a variety of retail needs shop at Wal-Mart based on price.
Differentiation
Wal-Mart is able to pursue a cost leadership...
It also can reduce costs at every link of its supply chain, by using outsourced labor and keeping careful watch over inventories. It uses a 'Just In Time' inventory approach, forcing suppliers to provide small batches of inventory at a moment's notice (Atkinson 2006). This keeps stockpiled inventory down and even though it strains suppliers, they comply because of the power of Wal-Mart. Smaller organizations that cannot compete with Wal-Mart using such tactics must pursue a differentiated approach, offering by a unique product that may not be the cheapest form of the item, but has a built-in audience.
Whole Foods is an excellent example of this approach. Although Wal-Mart is the largest purveyor of organic grocery items, Whole Foods is expanding across the nation -- even in a recessionary environment with a nickname of 'Whole Paycheck.' Whole Foods offers foods that are difficult to find elsewhere, such as gluten-free items, grass-fed beef, and organic products that are too…
References
Atkinson, Charles. (2006). Wal-Mart increases its supplier's inventory levels. Inventory Management Review. Retrieved: http://www.inventorymanagementreview.org/2006/04/walmart_increas.html
Lee, Amy. (2011). The story behind Groupon's spectacular success. The Huffington Post.
Retrieved: http://www.huffingtonpost.com/2011/06/02/groupon-ipo_n_870652.html
Paskin, Janet. (2009). Whole Foods: Too pricey to survive in a recession? Smart Money.
http://www.smartmoney.com/invest/stocks/is-whole-foods-too-pricey-to-thrive-in-a-recession/
The benefits of high-quality relationships come from relational resources (Wright, et al. 2005) they create. Such resources include durable obligations (e.g., arising from feelings of gratitude, respect, and friendship), network contacts and connections (including privileged access to information and opportunities, social status, and reputation of influential others), and the ability to have open information exchanges with those around them (Valle & Halling, 1989). Relationships that do not develop so well are
furnishes a literature review of five strategic management viewpoints, that include Porter's (1980) Generic Strategies, Porter's (1980) Five Forces, Porter's (1985) Value Chain Analysis and Bowman and Faulkner's (1997) Bowman's Strategy Clock. This paper has made use of UK's Tesco supermarket retailer for case study. The analysis of Tesco using Porter's Generic strategies revealed that Tesco's generic strategy needs to be cost leadership given that they can successfully differentiate
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Jack Welch Leadership Strategies Jack Welch is rated as the greatest CEO of the current generation and one of the greatest business leaders of all times. The legendary leader, donned the top post in General Electric (GE) from April 1981 to September 2001, taking the company from mediocre levels to the very top levels, in the process turning the very basic concepts on which businesses were run till then. When he
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Low Cost Differentiation Preemptive Strength Brand identity Differentiate from other low cost providers to increase volume Brand identity commands a premium price, increasing margin Brand identity becomes identifiable with a specific niche Build brand identity quickly to reduce the threat of new entrants Weakness Lack of diversification Diversify into many products to promote volume sales Brand extensions Diversification is not part of this strategy. Diversification is key to opening new market opportunities. Opportunity Geographic expansion Increase volume Increase volume Increase volume Increase opportunities Threat High substitutability Inherent in the strategy -- low cost