Assignment on Strategic Management

Assignment three
Course title: Strategic Management
Course code: MGT 501

Submitted to:
Siddiqur Rahman
Assistant Professor
Department of Business Administration
Faculty of Business and Entrepreneurship
Daffodil International University
Submitted by:
Md. Mahbubur Rahman
Id: 201-14-3108
Section: B
Program: MBA, Major: Marketing
Daffodil International University
Date of submission: 24-04-2020
3.1 What is low cost strategy? Under what circumstances a company may apply low cost
strategy?
Answer:
Low cost strategy: Low cost strategy is a type of pricing strategy in which the firm offers the
products at low price. This strategy helps to stimulate the demand and gain higher market share.
Now we can describe under what circumstance a company may apply low cost strategy:
1. Price competition among rival sellers is especially vigorous.
2. The products of rival sellers are essentially identical and supplies are readily available from
any of several eager sellers.
3. There are few ways to achieve product differentiation that have value to buyers.
4. Most buyers use the product in the same way.
5. Buyers incur low cost in switching their purchase from one seller to another.
6. Buyers are large and have significant power to bargain down prices.
7. Industry newcomers use introductory low price to attract buyers and build a customer base.
Now we can understand under what circumstances a company may apply low cost strategy.

3.2 What is differentiation strategy? When a firm can apply differentiation strategy?
Answer:
Differentiation strategy: The essence of a broad differentiation strategy is to be unique in ways
that are valuable to a wide range of customers.
Now we can explain when a firm can apply differentiation strategy:
1. There are many ways to differentiate the product or service and many buyers perceive these
differences as having value.
2. Buyer needs and uses are diverse.
3. Few rival firms are following a similar differentiation approach.
4. Technological change is fast paced and competition revolves around rapidly evolving product
features.
Now we can understand when a firm can apply differentiation strategy.