Question

Research Target Corporation and assess your satisfaction with the company you researched and make recommendations about how that company could modify its business-level strategy to both increase your overall level of satisfaction and to attract new customers. Provide specific examples to support your response. Analyze the five business-level strategies (Cost leadership, Differentiation, Focused Cost Leadership, Focused Differentiation and Integrated Cost Leadership/Differentiation) to determine which strategy the company you researched most likely applies. Determine how your experience with that company might change if it switched to one of the other four strategies (your choice). Explain your rationale.

Answer 1

For any organization, it’s really challenging and essential to keep its customers satisfied with the quality of product & its associated services. To address the voice of customers (VOC) is the part of business etiquettes and every company tries to oblige the same.

Let’s take an example of McDonald and assess its product and services with an eye of a neutral customer. As a food outlet company, McDonald has expanded its presence in different countries while adopting the suitable business level strategies suiting to that particular country or location. If we look at the primary components of business level strategies, we can understand the McDonald’s business strategy in more detailed manner-

1. Cost leadership - McDonalds have been striving to offer its meals at reasonably low prices while keeping the margin of profit not very high. McDonalds is doing good at this front and its competitors would find it difficult to challenge McDonalds at this front.
2. Differentiation- This is the perceived feeling which customers get from the company offered products. With its variety of products like burgers, French chips and other stuffs, McDonalds is trying to woo its customers while giving them a feeling of fresh taste and novelty in its new products.
3. Focused cost leadership- This is the strategy, where a special price is offered to its customer’s considering the potential threat from other competitors. For McDonalds, market is not as favorable as it was some time back. Due to the onset of new business rivals like Burger king and Subway, McDonalds pricing needs to be quite flexible considering what its other business counterparts are offering.
4. Focused Differentiation- This is the area where McDonalds have to really work hard. Though McDonalds have grown in its business over the years but its product portfolios have not been so diversified over the years. Customers can perceive the feeling of not getting something new to their platter and it could be real business threat for them, considering other competitors are working really hard to dethrone the McDonalds from its summit position.

McDonalds has to come up with proper differentiation while giving its customers a natural feel that, despite coming over the age, McDonalds can still offer something unique to its customers, which others can’t offer.