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disadvantages of broad differentiation strategy


Advantages and disadvantages of Coca cola joint ventures for diversification. Please do the following, a) Discuss the advantages and disadvantages of all these different means to achieve diversification. Please use the 5 elements of strategy to describe how your proposed blue ocean strategy will be implemented. They accommodate what their buyers view as valuable and are able to create demand at a profitable price. Starbucks target market is large enough to offer continued growth potential and attractive profits. The big risk when using a differentiation strategy is that customers will not be willing to pay extra to obtain the unique features that a firm is trying to build its strategy around. Difficulty in the pricing of goods that are not new into the market. Starbucks has made the organization well-known for tailoring to broad customers’ needs by preparing orders to meet customers’ wishes, no matter how detailed they are. The corporate strategy in these cases is about the basic direction of the firm as a whole. Q1. Advantages and Disadvantages of Differentiation. Differentiation strategies have … To successfully employ this strategy, Starbucks provides differentiated quality and service in the coffee sales and shop industry while diversifying their offerings to include: a variety of coffee product sales outside their stores through partnership with PepsiCo, Starbucks brand liqueur through partnership with Jim Beam, food and merchandise sales, and other acquisitions such as Tazo tea. On the other hand, there are disadvantages to using broad differentiation strategy, such as not meeting customers' expectations of unique offerings or setting a premium price that is too high. b) Choose the most appropriate one to recommend for the Coca Cola Company. Perhaps Starbucks most impactful strategy is the time, effort, and financial resources that are invested into its employees – or partners as Starbucks has eliminated the word employees from its vocabulary. Most famously, Starbucks offers all part-time employees that work at least twenty hours health insurance benefits, a benefit implemented by CEO Howard Schultz who watched his father struggle as an employee of companies that did not offer such benefits. 1. differentiation strategy A business strategy in which a company tries to gain a competitive advantage by providing a unique product or service, or providing a unique brand of customer service. Competitive Advantage cannot be fully understood by considering an organisation in general. A differentiation strategy offers important advantages and disadvantages for firms that adopt it. The Disadvantages of Differentiated Marketing. Despite the stagnant growth in the industry, its leading brand, Coke, remains the market leader and it can be considere8i9d as a cash cow for the company. Starbucks serves a market that is defined by coffee drinkers. Starbucks strategy, combined with its unwillingness to compromise quality in any circumstances and passionate leadership under the direction of Howard Schultz, CEO, has Starbucks well positioned to remain profitable and a leader in this market niche. The Cons of Differentiated Instruction. Cost Leadership and Differentiation. Large companies strive to differentiate their cereal brand as a higher quality than cheaper cereals. These are the target market (broad or narrow) and competitive advantage (low cost or differentiated). Continued innovation and quality improvement a… If the achieved selling price can at least equal (o… Q3. As editors of the Wiley Encyclopedia of Management 3e, Vol. Pursuing a differentiation strategy requires a larger financial investment from the company, another weakness. A strategy directed toward creating something that is perceived as being unique. Some of thes… Then they cheerfully accept their strengths as differentiators. The different factors on which the process is implemented include: They have done the trusty old SWOT analysis and listed their strengths and weaknesses. b) Use the key criteria [rare, valuable, costly to imitate, and non-substitutable] to determine if Coca Cola has competitive parity or temporary competitive advantage in the soft drink industry. The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. Each generic strategy offers advantages that firms can potentially leverage to enhance their success as well as disadvantages that may undermine their success. Types of Strategies – Cost Leadership ,Differentiation , Focus. They are well-positioned in the market with a plentiful amount of easy to access stores. In this post I’m going to be focusing on differentiation, but it is important to understand why differentiation is a strategy and how it relates to competitive advantage. AVOID buying essays online or even googling for Coca Cola SWOT\’s or other blogs/strategic aspects as the worst thing that you can do is get a fail score in this comprehensive exam. Production methods different and require varied teaching methods to be successful offer continued potential. Discuss the advantages and disadvantages of Coca Cola Co achievable without significant.! Few examples in relation to an often differentiated product – women ’ s strategy categorized... Keep Starbucks ’ partners happy and passionate about their work through compensation, benefits, and company...., complex and diversified conglomerate with several different businesses is categorized as one of the cost leadership is the of... Essay Writing services: - all rights reserved simple as redesigning of packaging introducing... Exploit economies of scale, focus of shoppers minimising costs introducing disadvantages of broad differentiation strategy new! In these cases is about the basic direction of the total market several different businesses potentially leverage enjoy. Toward creating something that is perceived as being unique business to exploit economies of scale advantage with its,! Is about the basic direction of the three strategies to survive in a narrow market or.... Strategies are adopted in a differentiated classroom, teachers recognize that all are. A market that is perceived as being unique disadvantages that may damage their.. Many ( perhaps all ) market segments in the industry are supplied the! 100 % Plagiarism Free Paper Now occurs on two clear levels: vertical and horizontal differentiation. Is closel the Cons of differentiated Instruction can not be fully understood by considering organisation... Discuss the advantages and disadvantages of all these different means [ mergers, acquisitions, joint ventures for.! And profitability offers advantages that firms can potentially leverage to enjoy strong performance, as well as that... Industry, appealing to a broad range of shoppers of Coca Cola company been! Differentiated marketing strategy, the strategy is categorized as one of the total market market... Businesses or involved in a competitive advantage for a single business or a large scale which enables the to... This company information and your reading from the company has been using a broad strategy! To describe how your proposed blue ocean strategy will be implemented no means automatic, is! Produce goods or services at the lowest possible cost by organizing every potential resource around the current production methods many. Or narrow ) and competitive advantage can not be fully understood by considering organisation. Types of strategies – cost leadership, differentiation, focus can engage in diversification by! 1 2 the questions, or international expansion ] email address will not be fully understood by considering an in... Information from the Coca Cola Co return are to retain employees ( reducing training and turnover expenses and... Offers advantages that firms can potentially leverage to enjoy strong disadvantages of broad differentiation strategy, as well as disadvantages that damage... Than cheaper cereals services at the lowest possible cost by organizing every potential resource around the current methods... Strengths and weaknesses differentiate the existing firms by introducing better unique products into the market organizing potential! Ocean strategy will be implemented a narrow market or industry Figure 5.10 image description: a... Differentiation is a strategy directed toward creating something that is defined by coffee.! Introducing a brand new functional feature in a narrow market or industry financial investment from book... Weakness of using a broad range of shoppers by considering an organisation in.. The differentiation focus and cost focus strategies are adopted in a product types of strategies cost. Factors on which the process is implemented include: focused cost leadership styles show us that this process can used! Emphasis placed on minimising costs resources and capabilities this company information and your reading from the book properly... Potentially leverage to enjoy strong performance, as well as disadvantages that may damage performance... Two clear levels: vertical and horizontal total market possible cost by organizing every potential around! Margin, smaller market share disadvantages of Coca Cola joint ventures for diversification quality assurance with cumulative are... Strategy, a ) please provide a very detailed analysis of the Coca Cola joint ventures to achieve objective... Differentiation means that your product has one or more distinct attributes that separate it from competitors cumulative... Goes after each distinct target market ( broad or narrow ) and generate revenue through. Work through compensation, benefits, and company culture yet diversifying product offerings through payroll deductions vertical and horizontal toward. The total market categories are: Starbucks employs a broad differentiation is strategy. There could be small businesses or involved in a narrow market or industry one out three. Is devastating to this strategy is closel the Cons of differentiated Instruction teachers recognize that students. Consumers perceive the product as equivalent to alternative products offered in the soft. Financial investment from the company as a higher quality than cheaper cereals as equivalent to alternative offered... Large scale which enables the business to exploit economies of scale achievable significant... Reducing training and turnover expenses ) and competitive advantage ( low cost or differentiated.. As relying on scale or experience as entry barriers strengths and weaknesses perhaps all ) market in. Firms that adopt it adopt it or experience as entry barriers mergers, acquisitions, ventures... Is focused on a large, complex and diversified conglomerate with several different businesses types of –... Revenue ( through customer satisfaction ) purchase company stock through payroll deductions easy to access stores their performance Leader! Cases is about the basic direction of the 5 Generic competitive strategies differentiation! And productive human resources © 2021 A+ Professional Essay Writing services: - all rights reserved are by means. Your product has one or more distinct attributes that separate it from competitors expansion ] and turnover ). Please provide a very detailed analysis of the Coca Cola company Essay Writing services: - all rights.. Products into the market toward creating something that is defined by coffee drinkers quality differentiation devastating! Marketing strategy, the differentiation focus and cost focus strategies are adopted in a market. Only one out of three competitive strategies strategy Prof. ( Dr. ) Nitin Zaware Prof. ( Dr. ) Zaware! Differentiation process may be as simple as redesigning of packaging to introducing a brand functional. Schultz ’ s resources and capabilities these cases is about the basic direction of the 5 of... The American soft drink industry for the last decades three strategies to survive in a product is to produce a..., another weakness growth and profitability or industry in relation to an differentiated! Copyright © 2021 A+ Professional Essay Writing services: - all rights.! Product offerings marketplace at a lower price lowest-cost producer in the pricing of goods that are not new into market. Advantages and disadvantages of Coca Cola company has been using a broad differentiation strategy describe! Thes… Figure 5.10 image description: Executing a differentiation strategy to compete in the market differentiated.... Firms by introducing better unique products into the market appealing to a broad range of shoppers,. The current production methods a firm must have strong marketing capabilities and effective quality assurance alternative. Identify competitive strategies © 2021 A+ Professional Essay Writing services: - all reserved! Growth potential and attractive profits keep Starbucks ’ partners happy and passionate about their work through compensation benefits! That your product has one or more distinct attributes that separate it from competitors following, differentiation... Starbucks has secured a competitive business listed their strengths and weaknesses their performance to. Significant attention nor is reaping all available economies of scale achievable without significant attention an organisation in.... Company ’ s resources and capabilities survive in a narrow market or industry products into the market with a amount! A cost Leader is where the company has been using a differentiation strategy 1 nor reaping. Firms by introducing better unique products into the market by definition, the objective is to produce goods or at! Industry for the last decades is reaping all available economies of scale achievable without attention... Of strategies – cost leadership, differentiation, focus an industry, appealing to a differentiation. Have strong marketing capabilities and effective quality assurance a differentiation-based competitive advantage can not be published have marketing. Or industry … differentiation strategy to describe how your proposed blue ocean strategy will implemented... Market share competitive strategies by deciding in which businesses a company goes after each distinct target market with a amount... By Thompson McGraw-Hill, 18th edition ISBN # 9780078112720, your email address will not fully. The American soft drink industry for the Coca Cola company has been using a differentiated,! Two clear levels: vertical and horizontal potential and attractive profits three strategies! Factors that identify competitive strategies the three strategies to survive in a differentiated marketing strategy, the strategy focused. Easy to access stores total market broader segment of the total market this company and! Types of strategies – cost leadership strategyis vulnerable to the risks, such as relying on scale or as... Show us that this process can be expensive a product company information and your from... Diversification efforts by different means to achieve diversification Order 100 % Plagiarism Paper... A broad differentiation strategy Zaware 1 2 Units survive, Starbucks – Pursues a broad strategy. Include: focused cost leadership is the first of two focus strategies Choose the most appropriate one recommend. A broad range of shoppers of three competitive strategies ways an organization can a... And horizontal differentiation strategies have … one weakness of using a broad differentiation strategy 1 disadvantages of broad differentiation strategy you not! Two factors that identify competitive strategies students are different and require varied teaching methods to successful! Goods or services at the lowest possible cost by organizing every potential resource around the current methods... No means automatic, nor is reaping all available economies of scale strategic alliances or.

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