Question

Discuss the business-level strategy of Cycles Devinci and suggest modifications if necessary.

Answer 1

1-CYCLES DEVINCI-

1-Cycles Devinci has already established itself in the Canadian market. It has become the leading market player,and this is attributed to how the brand entered the market.

2-The management also made informed choices regarding how to enter the market, including researching the market on the most appropriate market entry modes.

3-Mexico is the Asian - Pacific country that would provide the business with the most potential to achieve its goal.

4-PESTEL analysis shows the Mexico is the most suitable market for Cycles Devinci to invest in .

2- BUSINESS STRATEGIES AND ITS MODIFICATION BASED ON CYCLES DEVINCI -

1- Low - Cost Leadership- Examples are costco,Walmart, And H&M . Walmart is able to achieve low - Cost leadership by having a high market share and a strategy committed to low price.

2-The Entire chain revolves around offering the best prices to consumers. In order to do this, the company must source products at best prices.

3-( Eliminating excess packaging, buying unique product sizes to get class of trade discounts.

4- Costs are further contained through control of labor and efficient store operations.

5- Cost drivers include economies of scale ( big chain, big sales,thus company can buy more product cheaper).

6- DIFFERENTIATION: EXAMPLE-

1-Example of this would be Starbucks, Apple and BMW. Each of the companies products that are perceived by consumers as superior in some way.

2-As a result ,the companies can charge more for their products. Cost drivers for each of these companies include linkage ( they each have their own stores/dealerships to showcase products in an upscale manner.

3-Policy choices also impact these companies, in particular Apple and BMW as companies invest in continued research and development to improve product.

4-All three companies are impacted by location of cutlets ( high price for high visibility) as well as institutional factpra ( government regulations drive prices up - recycling for all).

7- AT THIS HIGH - LEVEL, EACH STRATEGY IS DEFINED AS FOLLOWS -

1- Cost Leadership-

-Organizations that pursue cost leadership gain a competitive advantage by reducing operating costs to a level below the industry average.

- Business owners then pass these savings on to their customers with low priced merchandise or services or maintain average pricing to increase their profit margin.

2- Differentiation-

- Companies that leverage a differentiation business- level strategy win market share and defend higher pricing by offering a unique product or service features that are valued by their customers.