Topic2.StrategyRevisited

Positioning strategies 5 best cost provider

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Unformatted text preview: , etc.]… But selling stuff that’s hard to sell is a key business strategy for us. It ends up giving incredible differentiation from other retailers, because they just can’t seem to sell the hard stuff. That’s why we give our first-year employees 235 hours of training, as opposed to the industry average of 7 hours.” Kip Tindell, the Container Store President UPF - International Strategic Management 2012 122 a. Positioning Strategies 3. & 4. Focused (or Niche) Strategies - Example When a Focused Low-Cost or Focused Differentiation Strategy Is Attractive • The target niche is big enough • Industry leaders do not view having a presence in the niche as crucial to their own success • It is costly or difficult for multi-segment competitors to meet the specialized needs of niche members • Few other rivals are specializing in same target niche • Focuser can draw upon customer goodwill and loyalty to defend against ambitious challengers • Focuser has resources and capabilities to effectively serve an attractive niche 61 28/04/12 UPF - International Strategic Management 2012 123 a. Positioning Strategies 5. Best-Cost Provider Strategies •  Best-cost provider strategies stake out a middle ground •  Between pursuing a low-cost advantage and a differentiation advantage •  Between appealing to the broad market as a whole and a narrow market niche. Deliver superior value by meeting or exceeding buyer expectations on product attributes and beating their price expectations UPF - International Strategic Management 2012 124 a. Positioning Strategies 5. Best-Cost Provider Strategies The Standout Traits of Best-Cost Provider Strategies Giving customers more value for the money by •  •  Satisfying buyer desires for appealing features/performance/quality/ service •  Charging a lower price for these attributes compared to rivals with similar-caliber product offerings To profitably employ a best-cost provider strategy, a company must incur lower costs than rivals in incorporating upscale attributes!! •  •  It is usually not difficult to entice buyers away from rivals with an equally good product at a more economical price. But… 62 28/04/12 UPF - International Strategic Management 2012 a. Positioning Strategies 125 5. Best-Cost Provider Strategies How a Best-Cost Strategy Differs from Other Two Strategies The target market for a best-cost provider The target market for a differentiator value-conscious buyers—buyers looking for appealing extras and functionality at an appealingly low price us cio ns uyers -co b a t lue — r va yers ing fo uct a h bu ook rod ort l cp ew si ic ba y pr ying an pa pr bu ice-c lo ye on pro okin rs— scio bu us dg ba uct a for a yers se t a ba me b s nt arg ic pri ain ce UPF - International Strategic Management 2012 The target market for a low-cost provider 126 a. Positioning Strategies 5. Best-Cost Provider Strategies When a Best-Cost Provider Strategy Works Best •  In markets where: •  Product differe...
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This note was uploaded on 10/18/2012 for the course BUSI 102 taught by Professor X during the Spring '12 term at Universitat Pompeu Fabra.

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