Wk2 DQ1

Discussion Question 1 - CLO1, CLO2 

What strategy would you implement if your company began to experience a decline in market share?
Please justify your answer.

Ans:

A company faces a decline in its market share because of factors like increased competition,

availability of substitutes, decline in market size, lack of product demand, and many such factors.

Since the market share is the major determinant of a company's growth, companies always aim  to

have that greater share of the pie. But because the business operate in a very dynamic environment,

for them to stick to a particular market position for longer time is quite a challenge. And that's why

they see fluctuations in their market share value. And when market share declines, companies adopt

different strategies to regain that share.

  However, the adaptation of one particular strategy goes through lots of analysis- internal

environment analysis and external environment analysis (Thompson, Strickland, Gamble & Strickland

III, 2008) . The proper analysis of the internal and the external environment can help companies

better tailor their market share strategy. The analysis help us understand how the world is and where

do we stand in that world.

For instance, our analysis of the world might tell that the competition of restaurants has massively

increased with increasing number of restaurants each year. And this number of substitutes might

directly affect our market share. An effective strategy here can be to touch the untouched market. If

the business is losing in the other market, they can gain in this new market. The new market is the

opportunity to increase the market size, and the sales, and the market share eventually.

Also, it allows the company to build the relationship with the customers in the new market. And as a

first mover, they always have this advantage of established relationships.

Likewise, one of the surest ways to increase the market share is to acquire the competition (Muller,

1995). This might be a difficult thing to do but if we can acquire our second best competition, we can

have that advantage of the alliance. Acquiring the close competitors allows us to acquire their existing

customer and reduces the number of competition at least by one. For instance, if Bakery Café close
competitors is Alina's Bakery, it can put up an acquisition deal that increases the overall customer

base.

To increase market share, there are other strategies like product innovation, introducing new product,

and so forth. We can adopt any of the strategies. But the best strategy is when we understand our

external and internal environment and form strategy accordingly that best addresses the market.

References

Mulller, D.C. (1995). Meregers and Market Share. Review of Economics and Statistics, 259-267.

Thompson, A. A., Strickland, A. J., Gamble, J. E., & Strickland III, A. J. (2016). Crafting and Executing

Strategy: The Quest for Competitive Advantage: Concepts and Cases.New York: McGraw-Hill.

Ans:

Every top brands come to a point of decline in market share someday. In order to tackle
this issue, these brands or companies come up with new ideas to keep themselves sustainable. In
order to tackle this situation of experiencing a decline in market share, first of all I need to find
out what percentage of market Share the company has lost followed by a complete analysis of
Brand wise decline, product segment wise and area wise, cost of production and product support
in market place. After this, I should identify the root cause analysis of decline in market share
and devise the Corrective Action Plan to address the issues.
Companies with high market share often receive better prices from suppliers, as their larger order
volumes increase their buying power. Also, increased market share and greater production go
hand-in-hand, with the latter decreasing; a company's cost to produce an individual unit due to
economic of scale decreases.
Innovation is one method by which a company may increase market share. When a firm
brings to market a new technology its competitors have yet to offer, consumers wishing to own
the technology buy it from that company, even if they previously did business with a competitor.
Many of those consumers become loyal customers, which adds to the company's market share
and decreases market share for the company from which they switched.
By strengthening customer relationships, companies protect their existing market share
by preventing current customers from jumping ship when a competitor rolls out a hot new offer.
Better still, companies can grow market share using the same simple tactic, as satisfied
customers frequently speak of their positive experience to friends and relatives who then become
new customers i.e. widely said as the word of mouth. Gaining market share via word of mouth
increases a company's revenues without concomitant increases in marketing expenses. For
example, I am running a business called "Global Journey Education Services” and this business
is more about word of mouth and networking.
Reference:
Zekiri, J., &Nedelea, A. (2011). Strategies for Achieving Competitive Advantage.
Fascicle of The Faculty of Economics and Public Administration, 11(2), 63-73.
Ans:

Basically, the product life cycle includes stages such as growth, maturity and decline. We need
to understand that in each stage businesses have to adjust their strategies to suit the needs of the
market and the business environment. And in the decline stages most of the businesses notice that
the sales begin to drop off for a product or service which may have been popular due to the low
demand (Brookins, 2018) However, there are said to be several ways where a business can create and
maintain a strategy during the decline stage and they are as follows:

1.Examine the product that you are currently offering and can come up with the different ways
consumers can use it. Suppose they can make a survey to the customers which will help to determine
if they use of the product in ways that other customers may find beneficial. For instance, when Clorox
Company wanted to increase sales for its Hidden Valley Ranch salad dressing, it began marketing the
product as more than just a salad dressing; the company encouraged customers to use it to dip their
pizza, vegetables and chicken wings.

2.Adding new feature to the existing product can also potentially get former customers
interested in the product again or further can attract the more consumers. And adding the new feature
can also be risky if the cost of the added feature are high and one do not see a return on your
investment.

3.Now, next one is reducing the marketing expenses by advertising the product to the
individual or companies who have purchased the product in the past. For example, you can segment
your email-marketing list so that your email promotions for the product go to customers who have
purchased it at least two times within the past six months. If you see a positive response, you may
consider promoting the product to potential customers, especially if you've created a new use or
added new features.

4.Well, stopping manufacturing the product can also be one of the good idea.  Discontinue it
and let the current inventory run down to zero. Furthermore, one may decide to offer a sales
promotion to move the product more quickly, such as a buy-one, get-one-free offer or 20 percent off
purchases.

5.Identifying the companies who sell complementary or competing products can be one of the
good ideas as they may have a similar target market, the marketing dollars to develop and promote
the product or the research capabilities to make changes to it. And one can sell inventory to that
company.
 6.By dropping prices, companies hope to lure customers away from competitors. The benefit is
higher market share, but it comes at a cost namely, lower margins per unit. This strategy is said to  
attract large company that have high economies of scale that allow them to operate at either a lower
marginal cost than their competitors or that make it possible to operate at a loss if needed. It's risky
because, once prices drop, it can be hard to raise them unless the company regains enough market
share to muscle out its competitors.

7.Share reduction: The overwhelm customer and only half of the potential users would show
the increment in users but not in market share. So, de-marketing would be a solution to reduce
temporarily user and selecting the potential or permanent users only; to the extent that businesses
selectively concentrate on those customer segments and product lines where they can market most
efficiently and profitably.

8.Risk reduction: A number of measures can consider by the firm to reduce the insecurity
surrounding their high market share, including (1) public relations, (2) competitive pacification, (3)
dependence, (4) legislation, (5) diversification, and (6) social responsiveness (Bloom & Kotler, n.d.).

Strategies should revolve around enhancement of product quality like performance, durability,
vivid and varied specification, reliability, serviceability, enhanced fit and finish. Similarly, service
quality must be up to that standard where assurance, empathy, reliability and responsiveness towards
consumers are consistence and precise (Solomon, 2011). To the conclusion, changing the internal
factors and adopting the external factors would increase the market share to the extent.

References
Brookins, M. (2018). How to Maintain a Strategy in the Decline Stage. CHRON.

Bloom, P. & Kotler, P. (n.d.). Strategies for high market-share companies. In Risk
management.  Retrieved from https://hbr.org/1975/11/strategies-for-high-market-share-
companies

Solomon, M. R. (2011). Consumer behavior: Buying, having and being. Uppersadle River, NY: Prentice
Hall.

Ans:

Strategy is an idea of an organization that is directed over long period which ensures growth

by achieving sustainable competitive advantage. Strategy is one of an essential element in every

organization because it pursues to synchronize and integrate the actions of numerous functional areas

of a business which ultimately helps in accomplishing long-term organizational objectives.

Now in case of decline market share, there could be numerous reason due to which the

market share is declining such as lack of product quality, bad sales representative, failing in meeting

customers' requirements or even intense competition. Thus, it is vital to have a thorough analysis of

industry before getting into conclusion and formulating strategy against it. Some of the basic areas for

analytical tools for preparation for companies' strategy can be PESTEL, SWOT, Porter's 5 forces, Value

chain analysis & five generic competitive strategies.

The five generic competitive strategies are the ideas of an organization that is directed over

long period which ensures growth by achieving sustainable competitive advantage. It can be on of an
essential tool on formulating strategies decline in market share. According to the Porter, the five

forces model strategies are listed as follows (Thompson, Peteraf, Gamble, & Strickland III, 2012): cost

leadership, differentiation focus (cost & differentiation) & best cost provider. For instance, IKEA is the

world's largest furniture retailer which specializes in stylish but inexpensive furniture. It can attain its

low cost by improving its supply chain management & lowering the packing cost by introducing 'Do-It-

Yourself' assembly principle making inbound logistics much easier. Likewise, differentiation in its

product which helps in meeting local demands for instance longer hangers in Italy, deeper wardrobes

in US (IKEA, 2014). Thus achieving differentiation on cost and differentiation.

Another way can be analyzing SWOT model which helps in knowing macro as well as micro

environment of the company. Strength and weakness are micro environment related topic which the

company can control. On the other hand, Opportunity and threat are two factors related to macro

environment which the company itself cannot control. For example, if I were to launch my Meals and

wheels business, my properly using this analyzing tool, I can be able to know my strength (providing

hygienic foods), Weakness (limited food stock and parking space), Opportunity (providing hygienic

food to the professional people like workers ) and threat ( other restaurant business and changes in

polices of the government). If my business market shares were to go down, after having deep analysis

on SWOT (which I've done in a simple way) can help me in formulating good strategy against the

decline of my market share.

Thus, the above mentioned are two analytical tools which can be helpful while formulating

strategies against decline in market shares. 

References

IKEA. (2014, Jan 11). About IKEA. Retrieved from ikea.com:

http://supplierportal.ikea.com/aboutIKEA/Pages/default.aspx

Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland III, A. (2012). Crafting and Executing

strategy. New York: Mc-Graw-Hill.

Wk2 DQ2
Discussion Question 2 - CLOs 2, 4 

What are the five generic competitive strategies? Briefly describe each one and identify the type of
competitive advantage that each strategy is aimed at achieving.

Ans:
 The five-generic competitive advantage are broad low-cost provider strategy, broad

differentiation strategy, focused low-cost strategy, focused differentiation strategy and best-cost

provider strategy. These strategies can be used by the companies in order to make sure that they can

stay competitive in their industry (Thompson, Strickland, & Gamble, 2007). Each strategy can be used

in order to make sure that the company can sell their product through these kinds of strategies.

The broad low-cost provider strategy tries to sell their product at the lowest-possible cost by

making the product at cheap price and selling it in the market (Porter, 2008). This strategy will be

successful in market with high competition where innovation is difficult to define. A firm that chose

this strategy generally provide relatively standardize product with characteristics or features that

typical customer accept at the lowest competitive price. It is suitable for price sensitive market where

the consumers are conscious in the price of the products than the quality. If we look at the footwear

market, GoldStar, a Nepali-brand is able to sell their product at prices a-third of other brands which

will increase their sales in the overall market.

The broad differentiation strategy is used in markets where the product has to be unique and

the market is highly competitive, and innovation is possible. The major focus of this strategy is to

provide buyers with such a luxurious product of which they are willing to pay premium price (Swaim,

2010). Most of the tech gadgets play on this strategy, if we look at companies like Samsung and Apple

which are biggest players in the smartphone market, they try to provide something different in order

to win the market. While Samsung has started using OLED screen panel in their phone which gives

them the ability to make smaller phones and provide a unique look in 2016, Apple were betting on

technology like Force Touch which would give their screen various level of touch sensitivity which

would allow people to use their phone in a different way than what they were using in the past.

The focus low-cost strategy is used in niche market where the people we can sell the product
to are less and we provide the product at a cheaper rate compared to the competition. This can be in
market where the product will be sold to small group of products and will get low-cost in that market.
If we look at Tata's revolutionary car also termed the "World's Cheapest Car”, it was targeted towards
lower middle class Indian family who owned a bike but had difficulty in buying a car (Palepu, Anand, &
Tahilyani, 2011). So, they made a car with minimum feature and cut the price of the car leading to a
focused low-cost strategy. Besides that, this strategy emphasizes on focusing on certain type of
buyers doing a through segmentation and finally provide their premium product to their potential
customers.For example: Royal Royce is one of the premium car around the world which is only
available for the well renounced people.

The focused differentiation can be seen on cars in terms of Rolls-Royce where the cars are of
premium quality and offer premium features. These cars are targeted towards the people of highest
stature of the society. They use oak wood interior and airplane-grade engine and also make sure that
their car isn't just both by people with money but rather by people with high stature in the
society. The major reason it's different from another brand cars is due to hand made with perfection
on everything such as. from detailing to performance along with its status symbol (Ibrahim, 2014).
Therefore, due to this reason it's one of the ultra-luxurious cars for richest people. This strategy
makes sure that their products are focused on a small group and will have the top of the line features
to cater just that group.
 The best-cost provider strategy means to provide the substitute product for the competitor at

a lower price. These products are usually highly competitive where the market is growing and there

are many competitions. The product with the best feature at cheaper price will win in this market

because their products are both unique and cheaper than similar product. Dell can be a company

which uses this strategy quite well, while they provide premium product in terms of the Dell XPS

laptops, they keep the cost lower than other brands by carrying as low inventory as possible which

decreases their inventory cost across line from raw materials to the final product by using Just-In-

Time inventory however, providing some of the best personal computers.

So, these are the five generic competitive strategies that companies can use in order to make

sure that they are the best in their industry.

References
Ibrahim, J. (2014, Oct 22). Rolls-Royce: Biggest and most expensive Phantom fleet ever. Retrieved
from cnbc.com: http://www.cnbc.com/2014/10/22/rolls-royce-biggest-and-most-expensive-
phantom-fleet-ever.html

Palepu, K., Anand, B. N., & Tahilyani, R. (2011). Tata Nano-The People's Car.

Porter, M. E. (2008). Competitive strategy: Techniques for analyzing industries and

competitors. Simon and Schuster.

Swaim, R. W. (2010). The Strategic Drucker: Growth Strategies and Marketing Insights from the
Works of Peter Drucker. San Francisco: John Wiley & Sons.

Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2007). Crafting and executing strategy." The

quest for competitive advantage. Concepts and cases. New York: McGraw-Hill.

Ans:

Competitive advantage is a capability to create superior value for a firm over its rivals. Competitive
advantage is a type of things which distinguishes us from our rivals in the marketplace (Tanwar,
2013). The five generic competitive strategies are given below:

Low-cost provider strategy: The lowest costs among the competitors within the industry. The main of
the firm is to provide the products at the low price than its competitor. We can take an example of
Bhatbhateni supermarket, it provides the goods at a low price than its competitor. It is one of the
competitive advantages which can grasp the attention of the customer when the customers are
getting the same products at a low price, they would choose that market.

Differentiation: It signifies to development of product or services that offers unique attributes that are
valued to customers. When there are different products of the same brand, the particular company will
have a competitive advantage over other company which people prefer as well. For instance, Nike has
several competitors, such as Adidas, Puma, Ellesse, Fila, O'Neil, Reebok, Rip Curl, Kickers, Speedo and
Umbro (Business and Administrative studies, 2016). In the year 2000, they held the highest market
share for footwear. It is believed that because of the variety Nike has a competitive advantage.
A focused differentiation strategy: A focused differentiation strategy mostly focuses on narrow buyer
segment as well as outcompeting competitors with goods and services proposing which meets the
exact taste as well as requirements of targeted or niche members better than the product offered by
rivals (Thompson, 2013). For instance, Rolls- Royce which produces the custom-built car for certain
group of people.

Focused or Market Niche strategy: Focused or Market Niche strategy mostly focus niche area as well
as target those people who are capable with their products. It means keep focusing on the same
products with different upgraded features. For instance, Rolls- Royce which produces the custom-built
car for certain group of people. It is the example of the differentiating product.

Best cost provider: It is formed by the combination of both low cost and differentiation in products
strategy. The company which can provide quality products at low costs could attract the attention of
the customers. For instance, IKEA provides cheap and stylish furniture. So, it has been able to become
the world's largest furniture seller.

References
Business and Administrative studies . (2016, Jan 22). Retrieved from Marketing:
http://www.markedbyteachers.com/university-degree/business-and-administrative-
studies/what-is-competitive-advantage-and-how-has-nike-achieved-it.html

Tanwar, R. (2013, December ). Porter's Generic Competitive Strategies. Journal of Business and
Management, 15(1), 11-17.

Thompson, A. A., Strickland, A. j., & Gamble, J. E. (2013). Crafting and Creating Strategy. New York:
Mc -Graw Hill .

Ans:

As per Thompson, Strickland, Gamble, & Strickland III (2016), the five generic competitive strategies

to gain competitive advantage are:

1)Low-cost Provider

2)Broad Differentiation

3)Focused Low Cost

4)Focused Differentiation

5)Best Cost Provider

A low-cost provider strategy allows companies to achieve a cost-based advantage over the

competition. The main objective with this strategy is to be the overall low-cost provider of a good or a

service. We can see the example of cost leadership as a strategic move in companies like Wal-Mart.

The price at Wal-Mart is much lower than those of many other stores as it has the most reliable supply

chain management system. And the major advantage of this strategy is, it appeals to broad range of

customers.
Likewise, a broad differentiation strategy seeks to differentiate the company's offerings from the

competition. For example, Body Shop.  The brand focuses on organic products that again appeals to

broad range of buyers.

Similarly, focused low cost strategy focuses on a specific market niche, offering products to narrow

market instead of broad one. A firm employing focused low cost strategy usually enjoys high degree of

customer loyalty and this strong loyalty can often discourage other competition competing directly

(Narver,1996).

In the same way, a focused differentiation strategy chooses a small segment to focus its offering on.

With this strategy, the company tends to appear different from its competition. And companies like

BMW do this by considering the factor that customer consider most important such as brand

image. The company offers niche members products that are at times customized and appeals to

strong image for owing them.  

A best cost-provider strategy focuses on giving more value to the customers for money-through low

cost and upscale features-quality. The goal is to keep cost and prices lower than those of expensive

ones. For example, Hyundai. This car company provides lower prices for comparable quality and

features against the competition.

References
Narver, J.C. (1996). Competitive Strategy in the Market-focused Business.Journal of
Market-Focused Management, 159-174.
Thompson, A. A., Strickland, A. J., Gamble, J. E., & Strickland III, A. J. (2016). Crafting and
Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. New York: McGraw-
Hill.

Ans: The competitive strategy is about deciding where you want your business to reach and deciding

how to get there and competitive strategy deals exclusively with the specifics of its efforts to position

itself in the market-place, please customers, ward off competitive threats, and achieve a particular

kind of competitive advantage. Early in the process of crafting a strategy, company managers have to

decide which of the five basic competitive strategies to employ overall low-cost, broad differentiation,

best-cost, focused low-cost, or focused differentiation. Deciding which generic strategy to employ is

perhaps the most important strategic commitment a company makes it tends to drive the rest of the
strategic actions a company decides to undertake and it sets the whole tone for the pursuit of a

competitive advantage over rivals. The five generic strategies are:

Low cost provider strategy: It thrives on experimenting with ways that costs can be cut and value

chain activities can be streamlined. A company must do a better job than rivals of cost-effectively

managing value chain activities and/or it must find innovative ways to eliminate or bypass cost-

producing activities. This strategy is particularly aimed when the products of rival sellers are virtually

identical or very weakly differentiated and supplies are readily available from eager sellers, when

there are not many ways to differentiate that have value to buyers, when many buyers are price

sensitive and shop the market for the lowest price, and when buyer switching costs are low.  

Best cost provider strategy: Best-cost provider strategy is that competitive strategy which provides

company a competitive edge over its rivals especially by combing low or best cost usually to give

greater value to the consumer. It aims to provide various types of competitive advantages like strong

and control over the niche market and brand loyalty. For example, Lexus was introduced as a mean

for Toyota to compete in the High-end car industry among other high quality brands like Mercedes or

BMW.Here, the risk would be that the company may get in between other firms using low-cost and

differentiation strategies, the Low-Cost leaders may be able to drive customers away with lower prices

whereas the High-end Differentiators may steal customers by offering better quality products. A best-

cost provider strategy works best in markets where buyer diversity makes product differentiation the

norm and where many buyers are also sensitive to price and value.

Focused low cost: This delivers competitive advantage either by achieving lower costs than rivals in

serving buyers comprising the target market niche or by developing specialized ability to offer niche

buyers an appealingly differentiated offering than meets their needs better than rival brands. It is

based on either low cost or differentiation becomes increasingly attractive when the target market

niche is big enough to be profitable and offers good growth potential, when it is costly or difficult for

multi segment competitors to put capabilities in place to meet the specialized needs of the target

market niche and at the same time satisfy the expectations of their mainstream customers, when

there are one or more niches that present a good match with a focuser's resource strengths and

capabilities, and when few other rivals are attempting to specialize in the same target segment. For
example, buyers have significant power and right to bargain in this case, the companies surpass their

rivals from market by providing quality product with lowest affordable price.

Focused differentiation: It concentrates on particular segment of market especially by

differentiating products or services. To appear different than other rivals company's market offering

should be carefully designed to appeal the niche consumers. This strategy is aimed at offering product

that are designed to appeal to the unique preferences ad needs of a narrow, well defined group of

buyers  as opposed to a broad differentiation strategy that focused on many buyers and market

segments. For example: Progressive Insurance are much focused on people with traffic violations,

high performance car drivers, accident histories, teenagers and so on. 

A differentiation strategy is doomed when competitors are able to quickly copy most or the entire

appealing product attributes a company comes up with, when a company's differentiation efforts meet

with a market reception, or when a company erodes profitability by overspending on efforts to

differentiate its product offering.

Broad differentiation: It is the strategy in which company looks for differentiating the firm's product

offering from rivals' with attributes that appeal to a broad spectrum of buyers. The differentiation

strategy seeks to set company that is different from their customer by creating the unique products.

For example, whole foods that caters to provide healthy and organic foods which appeals to the large

customer segment. Through the successful broad differentiation strategy, it provides the company to

command a premium price for its product and increase unit sales as additional buyers is won over by

the differentiating features and also gain buyer loyalty to its brand which is the competitive advantage

the strategy aims to achieve. Similarly, through this strategy company could provide value to the

customers through their unique features in the product. 

                                    References.

Zekiri, J., &Nedelea, A. (2011). Strategies for Achieving Competitive Advantage. Fascicle of the

Faculty of Economics and Public Administration, 11(2), 63-73.

Ans:

What are the five generic competitive strategies? Briefly describe each one and identify
the type of competitive advantage that each strategy is aimed at achieving.
 For a company to achieve competitive advantage, it needs to provide a buyer with
the superior value than its competitors. Also, it should be sustainable to surpass this
advantage. Moreover, the five most basic strategic approaches for setting a company
apart from rivals and winning a sustainable competitive advantage as mentioned by
Thompson, Strickland, Gamble, & Strickland III (2016) are as follows:
Low-cost provider

Broad Differentiation

Focused low cost

Focused differentiation

Best cost provider

Firstly, a low-cost provider strategy helps us to achieve a cost-based advantage

over rivals. One of the main objectives of this strategy is to sell the products at the
lowest price to make customer repeat their purchase (Porter, et al.). For instance,
Gillette sells its products at the lowest possible cost to entice more customers. Though
the handle is quite expensive to manufacture, they sell it on a break-even value as
once the customer has the handle, they are locked into buying the Gillette blades for
rest of their lives. So, they are making a profit by selling blades which they produce
in economies of scale.

Similarly, a broad differentiation strategy focuses on innovative the marketing mix

to stand out in the market and offer something new. They are working on creating the
niche for themselves to make their product superior from that of rivals. Some of the
successful adopters of this strategies are the Apple for its innovation, Rolex for its
luxury and prestige, Amul for its marketing campaign and so on. Besides being
superior, it is equally important for the companies to sustain their production and
innovation with respect to the current market trends and the technology for the long-
run competitive advantage.

In the same way, a focused low-cost strategy specializes on a narrow buyer

segment by serving them at the lower cost and price than the rivals. Though the
customer segment will get limited, features and attributes will be tailored as per the
tastes and requirements of the niche members (Thompson, Strickland, Gamble, &
Strickland III, 2016; Ormanidhi & Stringa, 2008). For instance, Netflix provides their
service at the lower cost than any of their competitor.
 Likewise, a focused differentiation strategy specializes in a narrow buyer segment to
serve the members through product differentiation. For instance, an organic store
operating in Sanepa named "Noma” is different from the regular store that sells both
chemical and organic products. It is because Noma has customized and specialized only
on organic products and focuses on one specific group of customers (organic food
purchaser, organic beauty products purchaser). Also, Lululemon specializes in high-
quality yoga clothing whereas the sports channel only provides the news of various
sporting events.

Lastly, best-cost provider strategy as a hybrid strategy blends the various elements
of low-cost provider and differentiation strategies to give customer better service and
experience at the lower costs. It is highly suitable for the value conscious buyers who
are willing to pay a fair price for both functionality and performance. Some of the
companies that use these strategies are the Bimbo Bakeries, Black Eyed Pea, Goodyear
and so on. Therefore, these are the assessment of five generic competitive strategies
required for the competitive advantage.

References
Ormanidhi, O., & Stringa, O. (2008). Porter's model of generic competitive
strategies. Business Economics, 43(3), 55-64.

Porter, M. E., Stalk Jr, G., Lachenauer, R., Hamel, G., Prahalad, C. K., McMillan, I. C., &
McGrath, R. G. (n.d.). The Five Generic Competitive Strategies. G. Thompson. Generic
Strategies.

Thompson, A. A., Strickland, A. J., Gamble, J. E., & Strickland III, A. J. (2016). Crafting
and executing strategy: The quest for competitive advantage: Concepts and
cases. (Twelfth ed.). New York: McGraw-Hill.
 

Reply

Wk2 DQ3
Discussion Question 3 - Applied Concepts (AC) - Week/Course Learning Outcomes 
Using your textbook, LIRN-based research, and the Internet, apply the learning outcomes for the
week/course and lecture concepts to one of the following scenarios: 

As applied to your current professional career 

As applied to enhancing, improving, or advancing your current professional career 

As applied to a management, leadership, or any decision-making position 

As applied to a current or future entrepreneurial endeavor 

OR 

Using your textbook, LIRN-based research, and the Internet, apply the learning outcomes for the
week/course and lecture concepts to a business organization that exhibits and demonstrates these
concepts. You should develop a summary of the organizations strategy and how they use these
concepts to compete. 

This is a learning and application exercise designed to give you an opportunity to apply concepts
learned in a pragmatic and meaningful way that will enable you to gain valuable and relevant
knowledge in an effort to augment your skill set and enhance your professional careers.

Ans:

 This week we learned about the concept of evaluation of the company's internal and external
environment of the company while making the strategies for the company. The internal
environment means the strategies which are made within the inside of the company. In the
internal environment we consider strategies in resources, decision makers, life cycle stage,
culture value, power, goodwill, brand etc. (Funk,2016). And for the external environment the
influences of strategies are: general environment, external stakeholders.

     For the internal and external environment, we learn about the SWOT analysis which every
company does to know their position and what strategies need to be made. This is very important
for us as business student we need to analyze SWOT and we needs to go through the financial
ratios, human resources, marketing etc. As in this course, I have chosen Dabur company Ltd.
Here, in this company strength is that the company is well- known in the market. From this
analysis we able to know the factors of the company which help me to make effective strategies.

     This week we learn about the porter's five competitive which is low cost- leadership,
differentiation product, best- cost, focused cost, and focused differentiation (Porter, 1986). This
five competitiveness will help me in my business to have low- cost than the rivals who would
attract the customers', other is main competitive advantage which is different product than other.
For instance: as my company for this course is Dabur, for thus company there are many
competitors in the market. The competitive advantage of Dabur Company is they have extensive
distribution channel which cover rural & Urban market through 600+ distribution. Also this
company has use IT strategies enabler for its business strategy and also optimizing the company's
internal logistics and distribution process for mega retail customers. They have use the strategies
of consistency of sales in grocery stores, improved service to drug stores and also increased their
sale through wholesale channel which has helped the company Dabur to have competitive edge
over other companies like: P&G, HUL, ITC.

    This week we came to know about the internal and external factor analysis will help the
company to achieve the competitive advantage.

References

Funk, C. (2016). Business Strategy: Internal And External influences.

Porter, Michael, Competitive Advantage, The Free Press, NY, 1985.

Ans

This week we learned about internal and external environment analysis which holds a major say while
forming any business strategy. Particularly, we uncovered different tools such as PESTEL, SWOT, and
Porter's five competitive force model to better understand what's happening with the world and where
do we stand within that world.  

Even if we start our own venture or simply work for an organization, it's always important that we
identify our competency and competitive visibility in the market (Hofer, 1975). An internal analysis of
our organization provides useful information about our strength, weakness, opportunities, and threats.
And the information generated through internal analysis helps us to develop strategy to sustain our
existence.

An internal analysis can help us evaluate our internal effectiveness. Be that be our supply networks,
our sales numbers, our distribution networks, or our production efficiency, we can always use the
analysis to either form or amend or better our business strategy.

Likewise, we always need to analyze our external environment. And learning about tools like PESTEL
and Porter's Five Competitive Fore Model, we believe we will be able to make better strategy for our
organization.

Because we operate within an environment that comprises of political, economic, social, technological,
and legal environment, we have to understand them. We have to understand how they may affect our
business. For instance, a new amendment of labor law like it happened here few weeks ago can
change the entire thing. The companies that were providing 10,000 basic salaries to their workers had
to change it to 13,000. And we can imagine the changes they had to make to their entire working
procedures.

Some companies might have agreed to offer 13,000 basic salaries and cut down the employees'
benefits while others might have stick to 10,000 and have agreed to increase the employees' benefits.
That's how strategies are made. There are various factors that might affect the way business
operates. And it is very important to understand these factors and best incorporate them while
forming the strategy. Ignoring such factors might lead to business crisis (Chang, 2010). Thus,
organizations have to form strategy analyzing the internal and external environment that directly or
indirectly affects the business. And this understanding, I believe, will help us make better business
strategies.

References
Chang, T. (2010). Sustainable Business Strategy and PESTEL Framework. International Journal of
Competing, 73-80.

Hofer, C.W. (1975). Toward a Contingency Theory of Business Strategy. Academy of Management

Journal.

Ans:

This week in the course "Business Strategy Development” we went through how an
internal and external environment related to a firm is assessed and based on those assessment
how firms build strategies. Similarly, we learned about Porter's five force analysis, Porter's five
generic models of competitive strategy, the PESTEL and so on. The knowledge and
understanding of these topics essentially enable us to know how a business is affected by internal
and external factors and how should those factors should be identified and assessed (Thompson
Jr, William, Gamble, & Strickland III, 2018). With regards to the applicability of these concepts,
they are all applicable to our professional careers.

First as a prospective entrepreneur and a business professional, analyzing the current

market conditions along with the internal business functioning enables us in identifying the core
competencies and fallouts for our business or the businesses that we are working for. This
subsequently helps us understand what we should sustain and what areas need improvement on
in order to make the business competitive in the market for a foreseeable period of time.

Similarly, the porter's generic models enable us in understanding what sort of strategy
would be of high use in the market we are operating, and what strategy must be used in order to
be competitive in the market. For example, Aero-bricks is a prefab construction material supplier
here in Nepal that has been operated by my seniors, there if they ask for my suggestions then
now I would be able to connect what strategies among the generic models - such as low-cost
provider, broad differentiation, focused low-cost, focused differentiation, best-cost provider -
could be of high applicability for them.

Similarly, as a part of the broader economic system, I came to understand the importance
of the PESTEL factors which are the broader macroeconomic factors that affect the businesses.
Hence, the learnings from this enable us to understand while forming a business strategy, firms
must consider the broader macroeconomic factors such as political, environmental, socio-
cultural, economic, technological, and legal environment.

In this way, the learnings from this week enabled me in understanding more on business
strategy development and is of high applicability for business students and business aspirants
like us.
 References

Thompson Jr, A. A., William, M. P., Gamble, J. E., & Strickland III, A. J. (2018).Crafting &
Executing Strategy: The Quest for Competitive Advantage: Concepts
and Cases (21st ed.). New York: McGraw-Hill Education.
Ans:

The second week of learning strategy has provided me a deep insight regarding important topics in
strategies. We learned about the concept of evaluation of company's internal and external
environment before formulating strategies.

Assessing both internal and external environment is very important in order to execute
successful strategy. The internal micro-environment comprises of factors like man, machine, money
and materials. These are the controllable factors within the company. Likewise, there are some
uncontrollable factors that needs to be assessed before formulating and executing strategy. These
external macro-environment consists of PESTLE factors which is political, economic, socio-cultural,
technological, legal and environmental factors (Thompson, Strickland, Gamble, & Strickland III,
2008). It is also very important to consider Porter's 5 force Analysis while making strategies.

Relating the learning outcomes of this week, I understood how companies are using these
models when making strategies. In the food industry, we can see that there are numerous restaurants
and cafés in every corner of our city. The barrier to entry for a start-up café or restaurant is very
minimal and this has resulted into high competition. The new restaurant outlets that are being opened
are providing unique food varieties of international taste and because of this the market share of
restaurants has been more divided.

First and foremost, what a business running in food industry must do is differentiate their
products from their competitions. This has been done very well by new restaurants who are
specializing in local delicacies like Newari food and Indian food. Also what can they do is have a
comfortable set-up for customers to sit. When it comes to eateries, people are very selective of their
choices because of increasing health issues. Therefore, it has also become very important for business
running in food industry to be price friendly, hygienic and provide a unique experience to its
customers in order to stay in the market. This could be one of the strategies that can be used by cafes
and restaurants operating in the city.

Secondly, it is very important to assess the internal environment of the business. A restaurant
must have competitive advantage over the food items they provide. This will help them in
differentiating from their competitors. Likewise, they can also strategize towards cost approach,
whereby restaurants can introduce themselves to be hygienic and charge cost accordingly to their
cleaner surrounding and hygienic food.

Also, any business must never forget to assess the political, environmental, socio-cultural,
economic, technological, and legal environment before formulating and executing any sort of strategy.
Thus this week's learning has been very insightful and has provided me with greater understanding of
internal and external factors that needs to be considered while making strategies.

References

Thompson, A. A., Strickland, A. J., Gamble, J. E., & Strickland III, A. J. (2008). Crafting and executing
strategy: The quest for competitive advantage: Concepts and cases. New York: McGraw Hill
Companies .