discussion
You are the CEO of Company A, a profitable market share leader employing a best-cost provider strategy.
However, you are now facing significant competition from Company Y (broad differentiation), and Company Z (low-cost provider).
Over the next 12 months, you cannot change your generic strategy.At the same time, you cannot wait a year to deal with the growing threats from Company Y and Company Z.
- Discuss the challenges facing Company A that stem from having to compete against both Company Y and Company Z.
- Identify at least two positioning strategies that will enable you to strengthen your competitive position with Company Y and/or Company Z.
At least 1 must deal with Company Y, and at least 1 must deal with Company Z.
You must explain how each option is consistent with your best-cost provider strategy and how each option will enable you to maintain or increase profitability and/or market share.
Required.
- Exam essay format (APA not required).
- 1-1½ pages.
- Write essay in this document beginning on the next page
Solution Preview
No company can totally avoid the impact of competition and increasing costs. Hence, it is essential for managers to understand the future challenges that may arise due to other businesses that are competitors in the same line of products. In this case, Company A enjoys a large profitable market share because of running its business as best-cost provider. A best-cost provider is a strategy is where a firm offers its customers products at low costs while at the same time offering substantial differentiation. The aim is to keep prices and costs of products lower than competitors with comparable quality features.
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