Question

What are examples of each generic business-level strategy in the apparel industry? What are the limitations of examining firms in terms of generic strategies?

Answer 1

Answer:

There are four generic business level strategies:

1) Cost leadership- It represents gaining market share or attracts customers by keeping the prices low by increasing the purchasing large number of supplies. Example- Walmart, H&M

2) Differentiation Focus- Offering unique features in your product and services while targeting a small market. Example- Polo Ralph Lauren

3) Cost focus- It represents the lowest prices of product and services and targeting small market which means less competition. Example -Adidas

4) Differentiation- Targeting a large market by offering unique features in your product and services. Example -Zara

Limitations of examining firms in generic strategies:-

a) Once the firms have decided to adopt or adapt cost leadership they stop investing in the advertisement to keep the prices low which may harm the brand in the long run.

b) The strategy applied by the firm may be easily affected or simulated by the competitors.

c) Differentiation strategy is quite expensive and not suitable for all firms.

d) Choosing differentiation may not be always a good strategy as the majority of the people prefer price over uniqueness.

e) Focusing on the limited market gives limited opportunity to expand and they have to forgo the benefit of capturing the large market through economies of scale.