5 - the benefit of having low cost cannot be sustained for...

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Describe the three generic sources of a company's growth, their relative importance for its growth, and what this means for a company's strategy. (150 words) Solution: The three generic sources of company’s growth and its importance are explained as under – 1. Cost Leadership: Cost leadership strategy is a market strategy in which the seller charges a very low price in order to drive out its competitions in the market. The biggest advantage is that charging lower prices increases the sell of the product and also removes competition in the market. However the greatest weaknesses of using cost leadership strategy is that with the change in technology or advancement in technology
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Unformatted text preview: the benefit of having low cost cannot be sustained for a larger period of time. 2. Focus: Under this strategy a company focuses on a specific niche of the market instead of serving the market as whole. This helps the company to create base for its product and is suitable for small business which cannot expand its base entirely and would prefer a small customer base. 3. Differentiation: under this strategy company creates a differentiated from the market which makes its product exclusive. This is significant in those market where customers taste changes and are not much price sensitive. It also helps company in getting new customers easily....
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This note was uploaded on 12/05/2011 for the course ACC 134 taught by Professor Erik during the Fall '11 term at Colorado.

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