Princess Mae D.

Custodio

1. What are the main differences between a low-cost strategy and a differentiation strategy?

The main differences between low cost strategy and differentiation strategy is that low cost
strategy is when the company or corporation lowers costs in order to be able to lower their prices and still
be able to turn a profit, and differentiation strategy is when a company or corporation separates their
product in a different way than their competitors.

2. Why is market segmentation such an important step in the process of formulating a business-level
strategy?

Market Segmentation is a vital step within the method of formulating a business strategy. Well
developed business-level methodology can give a company an advantage over genuine and potential
adversaries. The market segmentation and comparing item separation procedure can give a firm a fleeting
business advantage. Most market divisions are the methods used to pull in the right customer.

Market segmentation adds to a business’ ability to cater to diverse needs of a considerably sized
consumer market, where various sections of consumers may have varied needs, interests and perceptions
of different products and services. Taking into consideration different conclusions derived through market
segmentation, businesses can allocate their resources to develop a marketing mix in coherence with the
demands and requirements of their target consumers. Market segmentation has evolved as an essential
marketing component and today, it is utilized by businesses operating in different industries to fulfill
various purposes and meet diversified marketing requirements.

3. How can a business-level strategy of (a) low-cost and (b) differentiation offer some protection against
competitive forces in a company’s industry?

Low cost:

 A Low cost position and the capacity to charge low expenses and still make benefits conjointly
gives an organization assurance against substitute item or administrations.
 Low cost will encourage an organization to assimilate expense will increment which will be gone
on downstream by intense suppliers.
 Low cost will conjointly change the corporate to answer to requests for profound quality rebates
from intense supporters and still make money.
 The Low cost organization is generally best situated to survive esteem rivalry in its business.
 A low cost organization may intentionally start a quality war in order to develop volume and
drive its weaker opponents out of the business.

Differentiation:

 Differentiation permits the organization to charge a premium worth for its brilliant or
administration, if it chose to do consequently.
 Differentiation helps the organization to develop general request and catch piece of the overall
industry from its adversaries.
 Differentiation gives prevalent unwavering quality, better style, unrivaled capacities and
elements, better purpose of-offer administration, better once deals administration and bolster,
 better marking.

4. What is required to transform a business-level strategy from an idea into reality? 


Lowering Costs through Functional Strategy and Organization:

Seeking after those useful level methodologies that outcome in unrivaled effectiveness and predominant
item unwavering quality

 Quality of the item ought to be kept up and at a comparative time the exertion or maternal mustn't
be wasted.
 The waste items should be changed or vital correction should be made
 Check the entire procedure of the production to cleave down the unneeded strides in the middle of
the underlying and consummation of First State creation.
 Implementation of just-in time Inventory control frameworks.

Differentiation through Functional-Level Strategy and Organization:

An organization can with achievement differentiate themselves by taking after right activities at the
deliberate level and it ought to sort out Itself appropriately. Other than that, there are particular deliberate
techniques that are intended to enhance Differentiation.

 Market sections should be done appropriately: right quality and measure of the item ought to be
presented at the right portions.
 Plan item that have high seen quality regarding capacities, elements and trustworthiness
 A well created customer administers to rapidly reacting and handling to the customer enquiries
and issues.
 New showcasing strategies that would arranged according to the business sector changes.

5. What do we mean by the term value innovation? Can you identify a company not discussed in the
text that has established a strong competitive position through value innovation?

Value innovation is being able to create a business that differentiates itself from the market. For
example, being a low price leader with good customer service. I believe that Mazda has established a
strong competitive position through value innovation. In my opinion, their vehicles recently have
become very aesthetically pleasing. They have really stepped up the game in the last few years by
redesigning their cars and offering a variety of safety features that you would see on luxury cars. Not
only do they look good, and have comparable features to luxury cars, they are also very affordable
and reliable.