Niche markets can allow for higher margins; however new entrants effectively position their product to a low volume high price model limiting their sales volume. Consequently, J&J should not overlook the low end segment of the consumer market,
When a consumer is purchasing a product they want to make sure they obtain maximum value for the money they spend and obtain a product that they perceive is greater than any other product in the market. Consumers look for something that sets a product apart from the rest wether that is providing a product at a lower price or by providing a higher quality product, ultimately a consumer will purchase the product with the greater perceived competitive advantage. Bunning’s warehouse is a company that gains its competitive advantage over the competition by offering the consumers products at lower prices than their competitors. Bunnings makes the promise of low prices through their slogan “Lowest prices are just the beginning.” The company does not just make an empty promise on providing the lowest prices but is able to back it up by saying “If you happen to find a cheaper price on a stocked item we will beat it by 10%.” (Bunnings Warehouse, Year Unknown) By creating and delivering the promise of lowest prices, Bunnings is able to position itself in the customers mind as providing superior value and as such has been able to gain majority share hold of the market through differentiating themselves from the competing companies through a competitive advantage. (Armstrong, Adam, Denize and Kotler, 2012) It is made clear through the example of
Power of Suppliers – Low There is low supplier concentration relative to the industry they sell to and a single supplier does not account for a large part of a retailer’s business. This weakens the overall power of the supplier because there are more supply options available for discount retailers. The emergence of private labels has also reduced supplier leverage. Supplier power is further weakened by low switching costs and non-differentiated products. As the retailers incur virtually no costs by changing suppliers it is easy for them to play them against each other to get better terms.
Why? Which leader would you prefer to work for? In a management view, I believe that Phil would be more effective. As an autocratic leader, Phil was able to achieve high productivity results. He was effective in terms of reducing costs.
Employee who engaged, work at higher level and interest to their job. This often leads to innovation in the business. The fifth benefit is profitability. If employees are engaged, they become more productive and efficient, positively affecting the company. A study by Wyatt Watson found that companies that have highly engaged employees produce 26% higher revenue per employee.
The company has developed a strategic plan which enables the company to relocate the store shelves of Best Buy based on the behavior of the market. Best Buy has created niche segmentation to each store making the profit of the company grow bigger because of diverse target markets in each location. The company has also developed a reward zone program which allows the customers to earn points and receive gift certificate for future purchase (Pride, 2008). Resources and capabilities that allow the firm to complete important tasks are one of the strengths of the company. Best Buy is able to effectively manage the flow of its inventory that helps them complete the important task of having the right merchandise on its shelves for customers to buy.
Having a focused-cost strategy means that the goods and services are aimed at a special type of consumer whose offerings cost less than competitors. A focused-differentiation strategy is aimed at a special section of the market that caters to the customers’ tastes and what the customers are looking for better than the competition. The best-cost provider gives customers “more value with average to above-average quality compared to the quality of the competition’s product (Thompson, 2012). The low-cost provider strategy aims at a spacious section of the market at right angles to the competitors and charges an overall less cost than competitors. The quality of the goods are acceptable to consumers and there are few frills.
Though the lower cost makes the exporting countries’ products competitive in the global market, the profit has been earned at the cost of individual’s wellbeing, social stability and development of the relative industries. The unfair situation that the workers in the exporting countries are confronted with has become one of the most severe ethical issues. It is unethical for employers to take advantage of workers’ weak awareness of their own rights and poorly forced law. The ethical issue was mainly arisen in three aspects: low payment, bad working conditions and overtime working. Child labor caused many other ethical issues in the society.
In my opinion, when lowering cost of capital in the case of equity, the business is able to issue more dividends which in turn contribute to the increase in the value of shareholders. Another negative effect of not increasing their shareholders value is easy access to being taken over. A larger company may see the advantage of the low shareholder value and shares and, therefore, find it easy to take over and in their own way increase their profit
The threats from competitors to the country are also ever-increasing. The reason for the same is that as Whirlpool is expanding its market to Asia as well, companies like Haier are giving it immense competition. So, there are chances that the company's cost of investment in these countries might not reach break-even as predicted. These are some of the vital risks that Whirlpool is associated with in its international expansion program. The customers at home feel the of-focus strategy and those