Question

Evaluate the suitability of Harvey Norman's competitive strategy(Cost leadership and Differentiation)

Answer 1

Cost leadership : This strategy emphasizes producing standardized products at a very low per unit cost for customers who are price sensitive. It allows a firm to earn higher profits than its competitors.

Differentiation : This is a strategy aimed at producing a unique product or service and directed at customers who are relatively price insensitive. In this case firm can charge higher price for its products in order to gain profits.

The applicability of strategy depends on the product the firm produces. The stability of the firm is decided by the strategy that it selects.