Topic2.StrategyRevisited

Topic2.StrategyRevisited

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Unformatted text preview: tly to consumers o  Eliminate low-value-added or unnecessary work steps o  Reduce materials handling and shipping costs by locating plants or warehouses close to customers o  Outsourcing UPF - International Strategic Management 2012 110 a. Positioning Strategies 1. Overall Low-Cost Provider Strategies - Example: •  Recall RYANAIR •  Europe's original low fares airline •  Still Europe's largest low fares carrier •  In 2009, Ryanair carried over 49 million passengers on 777 low fare routes across 26 European countries •  A fleet of over 100 brand new Boeing 737-800 aircraft, 99 to be added within 5 years •  Currently employs a team of 5,000 people, comprising over 25 different nationalities 55 28/04/12 111 UPF - International Strategic Management 2012 No baggage transfers Very limited service No inter-line connections No seat assignments Few ticket restrictions No airbridges Frequent, reliable departures Nothing free No after-sales service 25-Minute gate turns No meals Lean ground and gate crews High average pay No union Short-haul, point-to-point routes b/t secondary airports Standard fleet of 737s Stock options Pay for productivity Word-ofmouth ads Seat-back ads High aircraft utilization Frugal culture Lowest ticket prices Low agent commissions Monitoring of prices Tough airport bargaining Limited planning Spartan headquarters Combative team Source: Jan Rivkin UPF - International Strategic Management 2012 112 a. Positioning Strategies 1. Overall Low-Cost Provider Strategies What to avoid when following cost-leadership strategy? •  Higher unit sales does not automatically translate into higher total profits! •  Becoming too fixated on cost reductions… •  Even if you do everything right, still risky as a strategy… •  Sustainability of avenues of cost advantage 56 28/04/12 UPF - International Strategic Management 2012 113 a. Positioning Strategies 2. Broad Differentiation Strategies •  The positioning strategy of providing a product/service that is sufficiently different from competitors’ offerings that a wide range of customers are willing to pay more •  Differentiation is not simply about offering different product features… •  Added benefits: •  Premium price and/or increased sales and/or loyalty UPF - International Strategic Management 2012 114 a. Positioning Strategies 2. Broad Differentiation Strategies •  Unique taste – Coca-Cola / Pepsi •  Multiple features – Microsoft Office, iPhone, iPod •  Wide selection and one-stop shopping –Amazon.com •  Superior service – FedEx •  Spare parts availability – Caterpillar •  Engineering design and performance – Mercedes, BMW •  Prestige and distinctiveness – Rolex •  Quality manufacture – Michelin, Toyota •  Technological leadership – 3M Corporation •  Top-of-line image – Gucci, Prada, and Starbucks Types of Differentiation Themes 57 28/04/12 115 UPF - International Strategic Management 2012 a. Positioning Strategi...
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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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