Question

Compare and contrast a cost leadership (i.e., low cost) strategy with a differentiation strategy. Then explain if you were using either of these strategies to compete in the Capstone® simulation. Which segments? Did this work? Why or why not?

Answer 1

Cost leadership has the lowest costs in the industry, which can lead to lower profits will be lower but higher than competitors. A company will gain a competitive advantage by reducing research and production costs and raw materials, allowing companies to compete on lower-than-average prices. The automation level will be increased to improve the margin and offset the cost of the second shift / overtime. Differentiate with a focus on traditional high-end and low-end parts and will gain a competitive advantage through special design, high insight, convenience and new products. In this way, the company maintains its product and maintains market momentum by offering better size and performance. Our team does not use these strategies because our costs are very high and we have lost the market in the high end towards the end.