Question

One of the competitive strategy concepts that are most relevant to our country is cost leadership. In this strategy businesses mass produce a product, which keeps the prices low and gives an advantage over the competitor, as they are generally unable to compete with the low prices. The USA is consistently overproducing products, which leads to the lowest price attainable on these products. Even when there is a surplus of goods, we continue to produce them. It would be a wise decision to halt the production of these products until demand picks up again, rather than trying to off load them to other countries or taking up massive spaces in warehouses and storage containers, which eventually leads to waste.

Another competitive strategy that is popular here in the USA is cost focus. As a product increases in popularity, its cost goes down. This would be in line with the cost leadership aspect was discussed above, which leads to cheap products, but too much of it. If manufacturers and producers of product had the ability to make more accurate forecasts and diversify their businesses, we may not have the issues that we do with so much 'stuff'. We have become a nation where excess is common, but not the right products are in excess. We need to find a proper balance of how much products we produce over time to try to supply what is needed without so much excess.

Please explain what competitive strategy concepts are most relevant to our country in further detail

Answer 1

As the statement says excess is common, but the right product is not in excess. It means that people do not get what can accurately satisfy the demand. In this scenario of consumer focused demand, there is a need of differentiation strategy to fulfil the demand of each segment. As a part of differentiation strategy, firms produce goods that are specific to the actual needs of  the consumers. It helps consumers to get the right product and satisfy the demand. For example, one producer produces different types of toothpaste having different qualities to satisfy the different needs, and at different prices. Afterwards, consumers driven by their specific needs, chose to buy the products of their choice and become satisfied. So, differentiation strategy is the right competitive strategy where the people have income inequality, varying purchasing power and different choices. So, there is no one fit for all and differentiation strategy works well in the give economy.