What are the differences between a cost leadership strategy and a differentiation strategy? Provide an example of each
Cost leadership is one of the three major generic strategies that can be employed by business organizations to gain competitive edges over other players within the industry. The other two are the focus strategy and differentiation strategy. With cost leadership, goods, as well as services that are produced by the organization, are charged at very low prices. This can be achieved by organizations through the minimization of costs. It should, however, be noted that when the strategy is effectively employed, it can significantly get results.
This strategy has widely been applied by Wal-Mart Stores Inc. for customer attraction. The firm has achieved this by making sure that the products that they offer are very cheap in comparison to those that are provided by other stores. Additionally, the firm has maintained very low prices through an efficient and effective supply chain. Additionally, the firm has been boosted by large-scale operations. Besides, the firm sources its products from suppliers at very cheap prices. This enables it to sell its items at very cheap prices.
Differentiation strategy on the other hand involves the provision of specialized and customized services as well as products for every market segment. It involves the production of unique products within the whole industry. A number of firms have implemented this kind of strategy. This strategy has been employed by 3M Corporation. The firm pays much attention to technological leadership as well as innovation in order to gain competitive edges.
What is the difference between integration and a diversification strategy? Provide an example of each
Diversification strategy endeavors to enhance profitability through ensuring that there is higher sales volume got from the development of new products as well as new markets. Through diversification strategy, the organization will enhance the sales that it makes through the development of new products that are meant for newer markets (Mintzberg and Quinn, 1988).
The strategy was perfectly employed by McDonald when it started McCafe. When the firm started McCafe, it commenced providing fresh products that used not to be provided by the firm earlier.
On the other hand, there are a number of integration strategies. Horizontal integration takes place when a given company gets into a fresh business. The business may be related to what the business does or maybe completely different. Vertical integration is another form of integration strategy (Moore, 1995).
What is the difference between an acquisition and a merger? Describe a recent example of each scenario
A merger always occurs when two firms, in a number of cases firms with similar size decide to come together with the goal of being one single entity instead of having separate operations and ownerships (Buzzell and Gale,1987).
There is a difference between a merger and an acquisition. With acquisitions, a single company takes over the other and becomes the single owner of the firm. Between the two firms that are involved in the acquisition, one is always bigger than the other is. In this case, the firm that acquires the other is bigger. On the other hand, the firm that is being acquired is comparatively smaller. After the acquisition, the comparatively smaller firm will no longer be in existence. The bigger firm will manage it. The difference between the two is that the stocks that are held by the firm being acquired are not transferred to the acquiring firm as in the case of merges. However, the public should buy shares before the acquisition (Lamb, 1984; Mintzberg, Ahlstrand, and Lampel, 1998).
An example of an acquisition is that of Pepsi acquiring Mondolez (MDLZ), a firm that makes snacks. Another one is the acquisition of WiFiSlam by Apple.
Describe your plan for executing a strategy
For strategies to be excellently executed there are a number of issues that need to be considered. First, much emphasis should be laid on the key or top goals. There is a need to identify the most significant goals that have to be achieved. For every goal, there should be measures put into place in order to measure the indicated success.
Second, there is a need to ensure that everybody within the organization is aware of the roles that they need to play in order to make the organization achieve its goal and objectives. The actions that need to be taken in order to realize each goal should be given out. It should also be easy to measure the action’s success (Hamel & Prahalad, 1994; Senge, 1990).
Every achievement should be maintained or enhanced. This will play key roles in the execution of the strategy. Finally, there is a need for the establishment of continuous follow-through. Habitual team meetings ought to be conducted in order to report on the goal’s achievement progress.
References
Buzzell, R. and Gale, B. (1987). The PIMS Principles: Linking Strategy to Performance. New York: Free Press.
Hamel, G. & Prahalad, C.K. (1994).Competing for the Future. Boston: Harvard Business School Press.
Lamb, R.B. (1984). Competitive strategic management. Englewood Cliffs :Prentice-Hall.
Mintzberg, H. and Quinn, J.B. (1988). The Strategy Process. Harlow: Prentice-Hall.
Mintzberg, H. Ahlstrand, B. and Lampel, J. (1998).Strategy Safari : A Guided Tour Through the Wilds of Strategic Management. New York: The Free Press.
Moore, M.H. (1995). Creating Public Value: Strategic Management in Government. Cambridge: Harvard University Press.
Senge, P. (1990).The Fifth Discipline. New York: Doubleday.