Question

Identify two companies—one that you believe pursues a lowest cost strategy and another that pursues a differentiation strategy. Relying on personal knowledge, company annual reports, or articles in newspapers and business periodicals, discuss these company's competitive strategie

Answer 1

LOW COST STRATEGY

This is where a a firm offers a relatively low prices thannits competitors and thus it wants to stimulate more demand for its products hence gain a greater market share in the industry it operates.

Such a good example is the WAL-MART which has had great success using this strategy and it attracts even customers of low income. They offer low prices to their products than the competitors on a consistent basis.

They therefore source these products cheaply from their manufacturers and suppliers and benefit from huge trade discounts and proffits off thin margins per product but since they sell many products, the profits are high.

The Wal-Mart slogan is 'Everyday Low Prices' and this strategy really works for them!

DIFFERENTIATION STARTEGY.

On the other hand, the differentiation strategy is where development of the services and products are made with unique features and attributes that are of value to the customers and which they persieve as better than other products offered by their competitors.

For example the T -MOBILE

This is a cellular company that reaches out to the population niche tha tbare young or urban dwellers.

Theit strong unique color palette is very appealing.

Paying ETF's which is one of the biggest challenges when switching carriers.

Furthermore they allow customers ti bring in the unlocked phones so as to switch yo T -Mobile and this is so appealing to their clients.