Question

a)       When should a company go for Low-Cost strategy instead of Differentiation strategy?

b)      How a company will benefit from the Differentiation strategy? (8 Mark)

c)      What are the major risks involved in the execution of Focus strategies and how a company can mitigate those risks? (8 Mark)

Answer 1

Ans a: A company goes for Low-Cost strategy instead of Differentiation strategy because of the following reasons such as :

• The low-cost strategy allows commodities or co-operation to a broad variety of consumers near the most moderate value possible the business whereas differentiation strategy directed at providing commodities assistance recognized uncommon adaptation of manufacturing and focused on buyers that remain moderately valued inconsiderate.
• In low-cost strategy, businesses endeavor to select some specific corner or shop to acquire aggressive support whereas in the differentiation strategy the business endeavors to discriminate their atonement higher place including relevant commodity traits.

Ans b: Benefits of a differentiation strategy are as follows:

• Diminished cost opponent
• Uncommon stocks
• Stabler value edges
• Purchaser trademark reliability.
• Negatively recognized delegates

  Ans c: Risks involved in the execution of Focus strategies:

• ill-defined: A concentrate business may be “indistinct” with its opponents.
• Conflict: Extended opponents may determine that each business division assisted through some focus maneuvering business does engage moreover reliable of contentious pursuance.
• Exchanging Decisions: Consumer decisions within the corner store may replace into further exactly follow these concerning the more cultivated business.

A company can mitigate those risks by the following steps:

• Supports brand commitment.
• Should reach the engrossed buyers.
• Should be adequately equipped to fight on value.