Alliances and Corporate-Level Performance Corporate

Alliances and Corporate-Level Performance

Corporate Level-Strategy: Mixed Strategy (Low Cost and Differentiation)

Three basic types of corporate-level strategy exist for firms. The first is that of a 'low- cost' model, in essence, out-pricing all possible competitors. The second is that of differentiation, or doing something so unique there are few or no competitors within a specific market (another term for this might be market segmentation). Low-cost vendors are often generalists, while differentiators are by definition specialists. A final, third strategy is that of a combination of these two strategies (Harley 2004).

For example, in terms of 'low-cost,' Wal-Mart might be the paradigmatic example of such a strategy. Wal-Mart is not known for good service, high quality or a special product, but it provides many popular brand name goods and generic products at low prices, causing many consumers to flock to this establishment. It sells in large volume, serves consumers of all demographics, and makes a large profit. A store deploying a differentiated strategy might be a boutique grocery store such as Whole Foods. Whole Foods is not cheap, but it caters to a specific type of consumer with an interest in unique issues pertaining to food, such as consumers seeking out food that is local, organically grown. It also offers a variety of goods for special diets, like vegan and gluten-free consumers. No strategy is absolute, of course: Wal-Mart carries some organic produce, in response to consumer demand, but to find a wider variety of healthy cereals made with organic grains or gluten-free breads, rather than the cheapest price of Cheerios or whole grain Coco-Puffs, a consumer must go to the pricier Whole Foods that caters to his or her unique needs rather than Wal-Mart.