Question

Titan Computer Company manufactures a tablet computer called AllPad. The company sells these tablets through large big box retailers. This tablet computer is less expensive than similar products sold by AllPad’s competitors and has 16GB of internal storage compared to 32GB or more as offered by Pear Corporation, the leading competitor. The Titan Computer Company has recently experienced some increased production costs resulting from significant rework, whereas Pear’s reputation for quality is unmatched, and the company sells its product at a significantly higher price point than the AllPad. Titan Computer Company would like to improve quality and decrease costs. Your group has been tasked as a committee to produce a plan to accomplish this by improving processes and training production workers to reduce rework and failed quality inspections. Your committee believes that increasing quality will ultimately increase sales by at least 3% annually. Document the following. Is Titan Computer Company’s current strategy that of product differentiation or cost leadership?

Answer 1

*Cost leadership strategy-

In business cost leadership means taking competitive advantage by keeping cost of operation at lowest in industry. Cost leadership strategy often driven by company size, scale, efficiency, scope.

Cost leadership is different from price leadership. In cost leadership company lowest cost producer, not offer lowest price products and services.

Titan computer company sells Tablet computers at less expensive than its competitor.

Titan company recently experience in increased production cost due to repair work, quality issues.

No Cost leadership strategy used by Titan

*Product Differentiation strategy-

It is a marketing strategy that used by businesses to distinguish product from its competitor. Differentiation in product due to speed, power, performance, services offered.

For small businesses, a product differentiation strategy provides competitive advantage than market competitors.

Titan computers sells tablet computers similar to its competitor AllPad. And offer 16 GB storage than 32 GB storage capacity offerd by leading competitor Pear corporation.

Here, cost leaderdhip strategy not uses by Titan computer. However Product differentiation strategy used as against leading competitor Pear computers, as capacity performance and quality of tablet of Titan computers is different from leading competitor.

Now Titan computer company wants to improve quality and decrease the cost by way of training process and improvement process.

Walmart have presently uses cost leadership strategy by cut down excessive cost at every point and improve quality, therefore able to deliver product to consumers at low cost.

Committee of Titan Computer company believes that increasing quality ultimately increase sales. Reduction in cost of rework and cost of quality inspection failed. By going quality improvement. Adoption of such type of strategy called as cost leadership strategy.