Question

Berwick Ltd has always had a strategy of cost leadership; that is, selling high volumes of low-cost products at a competitive price. During a recent sales slump, Berwick Ltd saw its sales revenues drop dramatically and has decided to move strategically to a product differentiation strategy; that is, to sell lower volumes of high-quality products at a premium price. Discuss in your workshop group: What are the implications of this strategy change in terms of the usefulness of historical sales data for decision making

Answer 1

Since the company has changed its strategy entirely as it will now concentrate on selling Lower volume of high priced goods while earlier it was having a completely different strategy of selling high volume of low prices goods, in such a case as far as usefulness of historical sales data is concerned it will not be of much use.

However, it can be used in order to survey it's previous customer that are they willing it ready to buy a higher quality product which will be premiumly priced.

Further company may use,if available historical sales data of other companies who are dealing with sales of those high quality products in order to find the operational cycle and impact of various factors on quantity of such goods demanded by the customer.