Question

Consider best buy your business. Explain how you would use 2 strategies discussed in class to get and keep a competitive advantage over newcomer electronics?

Answer 1

Strategy 1: Cost Leadership

In this strategy, firms can decide to be the minimum cost producer in the market. The sources will vary with time and it also depends on the industry structure. It sometimes includes economic scale pursuit, preferential material access, and proprietary technology. There are many other factors. By becoming the low cost producer, firms can exploit and search for all cost advantage sources. When the firm is able to sustain the cost leadership, it eventually becomes a good performer in the competitive industry.

Strategy 2: Focus

Focus strategy depends on the competition choice in a given industry. The firm can choose a specific segment of the industry and then modify or tailor it as per the customer needs. The cost advantage is sought in the target segment. This segment includes buyers and production systems.