Question

Identify a company utilizing the distinct competitive strategies shown if Figure 2.10. Provide evidence to support your selections and cite your sources.

Figure 2.10 describes five general types of organizational strategy: broad differentiation, focused differentiation, focused low-cost leadership, overall low-cost leadership, and best-cost provider.

Answer 1

answer-

Starbucks

Starbucks employs a broad differentiation strategy. This strategy is concentrated on a broader segment of the total market. Starbucks serves a market that is defined by coffee drinkers. Starbucks has made the organization well-known for tailoring to broad customers’ needs by preparing orders to meet customers’ wishes, no matter how detailed they are. Starbucks is also well known for quality products, with stringent guidelines outlining how their coffees are to be prepared, as detailed as espresso must be served within twenty-three seconds of brewing.

Starbucks has secured a competitive advantage with its unique, yet diversifying product offerings. They accommodate what their buyers view as valuable and are able to create demand at a profitable price. To successfully employ this strategy, Starbucks provides differentiated quality and service in the coffee sales and shop industry while diversifying their offerings to include: a variety of coffee product sales outside their stores through partnership with PepsiCo, Starbucks brand liqueur through partnership with Jim Beam, food and merchandise sales, and other acquisitions such as Tazo tea. They are able to hook customers with the quality and service provided in their coffee shops which leads to customers’ purchases of other Starbucks labeled items such as bottled coffees in grocery stores or Starbucks brand liqueur at the liquor store.

Starbucks target market is large enough to offer continued growth potential and attractive profits. They are well-positioned in the market with a plentiful amount of easy to access stores. Perhaps Starbucks most impactful strategy is the time, effort, and financial resources that are invested into its employees – or partners as Starbucks has eliminated the word employees from its vocabulary. Starbucks offers their partners the opportunity to purchase company stock through payroll deductions. Most famously, Starbucks offers all part-time employees that work at least twenty hours health insurance benefits, a benefit implemented by CEO Howard Schultz who watched his father struggle as an employee of companies that did not offer such benefits. Schultz’s strategy is to keep Starbucks’ partners happy and passionate about their work through compensation, benefits, and company culture. His expectations in return are to retain employees (reducing training and turnover expenses) and generate revenue (through customer satisfaction).

Starbucks strategy, combined with its unwillingness to compromise quality in any circumstances and passionate leadership under the direction of Howard Schultz, CEO, has Starbucks well positioned to remain profitable and a leader in this market niche.

Walmart

another example of company which uses distinct competitive strategy is Walmart.

Walmart’s overall strategy is cost leadership. Their concept is to attract the largest number of customers while providing the lowest-cost general merchandise. They have been effective in doing so as they have the cost advantage and they control their cost drivers and constantly seek efficiencies out of their supply chain. Walmart works closely with suppliers who dominate the brands in their industry and who provide full lines of products for Walmarts stores. A large part of Walmart’s strategy is to meet with vendors and truly understand their vendors costs to learn how a vendor could cut down its costs in order to capture win-win relationships for both parties.

The company has grown by opening stores in smaller towns that surround a targeted metropolitan area and then saturating that are before they move into a new and saturates each territory. The chain has often put smaller retailers out of business when they enter a new market. In foreign markets, Walmart has done acquisition as well as store expansion and carries products that will match the tastes and preferences of the local buyers there.

Walmart is a company that experiments with different merchandise, changes displays, alters promotions, and shifts the store layout as well. Instead of remaining stagnant Walmart met customer needs with four different retail
concepts including discount stores, Supercenters, Sam’s Clubs and Neighborhood markets.

Walmart is one of the fastest growing companies and also has a high-profit rate and great financials.

What can we learn from Walmart? Of course, that cost leadership is a driving force and Sam Walton’s guiding principles of low-cost leadership can be super effective if well executed.

*i have given two examples of company which use this competitive strategies for your choice. pls give thums up if it helps.good luck.