ASSIGNMENT O3

Name: Muaz Khan

Course: Management Information System

Instructor: MISS FAIZA JAVED

Following are the brands which follows competitive strategies.

Cost leadership strategy

 Walmart
 IKEA
 H&M
Differentiation Strategy:
 Apple
 Tesla
 Patagonia
Focus strategy
 Starbucks
 Peloton
 GoPro
Innovation Strategy
 Amazon
 Nike
 Netflix
Customer Intimacy Strategy
 Disney
 Lulu lemon
 Zappos
Value Creation Strategy
 Toms
 Method
 Patagonia

Acquisition strategy
 Facebook
 Google

ANS 2

COST LEADERSHIP OF IKEA

IKEA, the Swedish multinational furniture retailer, has effectively implemented a cost
leadership strategy that distinguishes it in the competitive retail industry. The company's
dedication to delivering well-designed and functional furniture at reasonable prices has
positioned it as a global leader. Several key components contribute to IKEA's cost
leadership strategy:

1. Leveraging Economies of Scale:

Central to IKEA's cost leadership strategy is its ability to produce large quantities of
standardized products. Manufacturing in bulk enables the company to benefit from
economies of scale, reducing the average cost per unit. This approach allows IKEA to
offer products to consumers at competitive prices while still maintaining healthy profit
margins.

2. Innovative Flat-Packaging:
A distinctive feature of IKEA's cost leadership strategy is its innovative flat-packaging
approach. By designing products that can be efficiently packed in flat boxes, the
company minimizes transportation and storage costs. This packaging method not only
optimizes shipping space but also empowers customers to transport and assemble the
furniture themselves, thereby reducing labor expenses.

3. Vertical Integration for Efficiency:

IKEA practices vertical integration across its supply chain, overseeing various stages
from manufacturing to distribution. This involvement in each step enhances coordination
and cost management. The strategy allows IKEA to maintain control over product quality
while minimizing reliance on external suppliers.

4. Self-Service Model Focus:

The self-service model is a pivotal aspect of IKEA's cost leadership strategy. Customers
are encouraged to explore the showroom, select their products, and even assemble them
independently at home. This reduces the necessity for extensive employee assistance,
resulting in lower labor costs. The self-service model aligns with IKEA's philosophy of
empowering customers and contributes to overall cost-effectiveness.
5. Global Sourcing Flexibility:
IKEA's commitment to global sourcing enables the company to leverage regional cost
variations. By sourcing materials and components globally, IKEA secures inputs at lower
costs compared to relying solely on local suppliers. This flexible approach to sourcing
contributes to the overall cost efficiency of production processes.

6. Streamlined Product Range:

IKEA's product range is deliberately curated, focusing on a select number of well-
designed and functional items. This intentional approach simplifies the production
process, reduces inventory management complexity, and facilitates bulk purchasing.
Restricting product variation allows IKEA to realize cost savings in design, production,
and stocking.

In conclusion, IKEA's cost leadership strategy incorporates elements such as economies

of scale, innovative flat-packaging, vertical integration, a self-service model, global
sourcing, and a streamlined product range. Through these strategic choices, IKEA
consistently delivers affordable and stylish furniture to customers, maintaining a
competitive edge in the global market.

DIFFERENTIATION STRATEGY OF TELSA

Tesla's differentiation strategy in the electric vehicle (EV) market is multifaceted and
revolves around several key elements:

Technology and Innovation:

Focus on cutting-edge battery technology: Tesla invests heavily in battery research and
development, leading to longer range, faster charging, and more efficient batteries
compared to competitors.

Software-driven features: Tesla vehicles are essentially rolling computers,

receiving regular software updates that add new features and improve
performance, unlike traditional cars with fixed hardware and software.
Self-driving technology: Tesla leads the industry in autonomous driving
technology, offering Autopilot and Full Self-Driving Capability features that
set them apart from most competitors.
Design and Performance:
Sleek and minimalist design: Tesla vehicles have a distinct, futuristic
aesthetic that stands out from traditional, boxy car designs.
High performance: Tesla cars offer class-leading acceleration and handling,
often rivalling or surpassing luxury sports cars.
Unique features: Tesla offers exclusive features like expansive touchscreens,
panoramic roofs, and "yoke" steering wheels, further differentiating their
vehicles from the competition.

Brand and Image:

Luxury positioning: Tesla targets the premium EV market, focusing on high-

quality materials, craftsmanship, and brand exclusivity.
Environmental focus: Tesla positions itself as the leader in sustainable
transportation, appealing to environmentally conscious consumers.
Direct-to-consumer sales: By bypassing dealerships, Tesla controls the
customer experience and builds a stronger brand connection.

Customer Experience:

Supercharger network: Tesla's global network of proprietary fast-charging

stations eliminates range anxiety and provides a convenient charging
experience.
Over-the-air software updates: Tesla vehicles receive continuous software
updates, improving features and functionality over time, unlike traditional
cars that require dealership visits.
Mobile app control: Tesla owners can control various aspects of their car, like
charging and climate, through a user-friendly mobile app.

Additional factors:

Vertical integration: Tesla controls much of its production process, from

battery cells to final assembly, allowing for greater control over quality and
cost.
Strong leadership: Elon Musk, Tesla's CEO, is a charismatic and visionary
leader who builds brand excitement and attracts talent.
 Impact of Tesla's differentiation strategy:

Market leader: Tesla has become the world's most valuable car company by
market capitalization, despite its limited production volume.
Increased EV adoption: Tesla's success has spurred mainstream adoption of
electric vehicles, benefiting the entire industry.
Competition: Tesla's differentiation strategy has forced traditional carmakers
to develop their own EV offerings, leading to a wider range of choices for
consumers.
Challenges:

Maintaining affordability: Balancing luxury positioning with making EVs

accessible to a broader audience remains a challenge.
Production and quality issues: Tesla has faced criticism for occasional
production delays and quality control issues.

In conclusion, Tesla's differentiation strategy has been highly successful in

establishing them as the leading brand in the EV market. By focusing on
innovation, design, and brand image, Tesla has created a loyal following and
driven the broader adoption of sustainable transportation. However, they
face ongoing challenges in maintaining affordability, improving quality, and
staying ahead of the competition in a rapidly evolving market.

Value Creation Strategy OF PATAGONIA

Patagonia's value creation strategy goes beyond selling outdoor apparel and equipment. They
aim to inspire and enable environmental activism, while still offering high-quality, durable
products. Here's a deep dive into their approach:
Core principles:

Environmental activism: Patagonia is not just a company; it's an advocate for the planet. They
actively campaign for environmental protection, donate to environmental causes, and integrate
sustainability into every aspect of their business.
Durable, repairable products: Patagonia builds products that last, reducing waste and
encouraging responsible consumption. They offer repair services and extensive product
warranties, extending the life of their gear.
Transparency and accountability: Patagonia is open about their environmental footprint and
supply chain practices. They publish detailed reports and work with suppliers to improve their
sustainability standards.
Empowering customers: Patagonia encourages customers to participate in environmental
activism through product features like "worn wear" (a used-gear resale platform) and activism
resources on their website.

Key tactics:

High-quality materials and construction: Patagonia uses durable, recycled, and organic
materials whenever possible, extending product life and minimizing environmental impact.
Minimalist design: Patagonia products prioritize function over fashion, reducing material usage
and promoting timeless aesthetics.
Repair and reuse initiatives: Patagonia offers extensive repair services, encourages second-
hand sales through Worn Wear, and designs products for easy disassembly and repair.
Activism campaigns: Patagonia actively supports environmental groups, lobbies for policy
changes, and runs their own campaigns to raise awareness and inspire action.
Transparency and education: Patagonia publishes detailed environmental reports, discloses
their supply chain practices, and educates customers about sustainability through blog posts,
documentaries, and events.

Impact:

Brand loyalty: Patagonia has built a passionate and loyal customer base who resonate with their
values and mission.
Industry influence: Patagonia has pushed the outdoor industry towards more sustainable
practices, inspiring other brands to follow suit.
Environmental impact: Patagonia's activism has contributed to policy changes and protected
areas, making a tangible difference for the planet.

Challenges:

Balancing profitability and sustainability: Implementing eco-friendly practices can be

expensive, and Patagonia faces pressure to maintain its price point while remaining competitive.
Greenwashing concerns: Balancing activism with selling products can be delicate, and
Patagonia has faced criticism for potential greenwashing accusations.
Reaching a wider audience: Patagonia's premium pricing and niche market limit their reach to
a broader consumer base.
In conclusion, Patagonia's value creation strategy is a complex and ambitious approach to
create environmental impact through both its products and activism. They have
successfully built a thriving business while staying true to their core values, inspiring
many in the industry and beyond. However, they continue to face challenges in balancing
profitability, ethical practices, and accessibility.