Along with being in competition with themselves, they also need to worry about Kohl’s, Target, gas, and the internet. Everyone is trying to sell at the lowest price to help attract and retain you as a customer. What is amazing is that Costco doesn’t seem to have advertising on the television; they rely on word of mouth, whereas you see Wal-Mart commercials periodically. 2.) Sam’s, Costco and BJ’s all seem to have the same strategy just with slight differences, they all try to have high quality and low cost.
The managers want to expand the national market shares through this way to increase profits. Even when Best Buy began to use a new sales model in 1990, Circuit City still carried on the aggressive expansion program to open the market. Although resulted in too many stores in different places and the national market share has increased, however, its share in served markets had dropped in 1990. From this situation, it shows the expansion strategy did not work any more, because the market environment changed and competitors became stronger. Under the high competitive and fast-evolving electronic industry, no change means fall behind.
Specifically, US Pioneer was facing waning support from its dealers, some of which had resorted to “disparagement of Pioneer products and ‘bait and switch’ advertising.” Three major factors contributing to the deteriorating value network were US Pioneer’s strategic decisions concerning: (1) their distribution channels to the expanding market, (2) the change from Fare Trade practices to Free Market practices, and (3) the increased competition from “house brands” as well as compacts and consoles. As the stereo market expanded in the US, US Pioneer strengthened its distribution network by adding independent sales representative offices (In 1972 they had 6, but by 1975 they had added 10 independent and 4 company owned). These new representatives increased the number of dealers from 500 in 1970 to almost 3,600 in 1977 – a 72x increase in the amount of dealers selling US Pioneer products. The net effect of this was that it created increased competition between dealers, harming their profit margins. Furthermore, after US Pioneer signed a “consent decree” with the Federal Trade Commission (FTC) in 1975, they replaced their fair trade price sheet with one that listed an “approximate nationally
It influences the extent to which the value created by an industry will be dispersed through direct competition. There were several signs of industry growth at the time as was USA’s economy; this led to a number of newly emerging discount stores trying to exploit the potential of high profit. This led to intense competition at the time and increasing rivalry for market share. Due to this industry concentration was low at the time. There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry.
Dollar General in owned by Koldberg Kravis Roberts & Co. L.P (KKR) who own more than 79% of all shares in Dollar General. Some argue that part of the reason Dollar General has been so successful as of late is attributed to the economic crisis the United States experience during the second half of the 2000s. Economist believe that consumers will not shop at the Dollar General as much as the economy improves. In an effort to retain their existing customers and recruit new ones as the economy strengthens, Dollar General has begun to stock name brand items. Some analysts also believe that even when the economy improves, your average consumer will still look for ways to save money and continue to frequent the dollar discount stores.
Listo System is finding hard to differentiate itself in product and price from its competitors Power Shift to Buyer During 1990s, Listo was a great success. Listo inabilities to differentiate itself from the competitors jeopardize that success. If Listo had been able to differentiate and create competitive advantage, it would have created loyal customers and strong brand image. Creating loyal customers and strong brand image would help to keep bargain power to the seller. However, inability of Listo to differentiate shifts the bargaining power to Buyer.
Issue Manzana’s commercial insurance is a product for which low price is important in order to compete, but serving customers (agents) is what produces loyalty. Agents want rapid request turnaround so that they, in turn, can impress their customers. The agents will also receive their commissions more quickly. Fruitvale’s performance has deteriorated, as has its competitive position. Average turnaround time (TAT) has grown from about three days in 1989 to more than five days in 1991 while its main competitor, Golden Gate, has achieved two-day TATs and is now promising one day.
Option 1 has opportunity to add value to the firm as shown by the current value adding activities (Value Chain Analysis, Section 5.1, Question 1). Option 2 has also opportunity to add value as expansion into emerging market increases the market share of Tesco (SWOT Analysis, Section 9, Question 1). Option 3 is a “Value Trap” as there is no match with parent skills i.e. expanding into technology R&D. However, there is opportunity to add value to the firm as analysed earlier in Value Chain Analysis (Section 5.1, Question 1). 2.
3. GLC should consider if this plan would even be effective with the transportation of goods using this mechanism when there are quicker ways to ensure delivery. Also, they should consider if the customer will be faced with higher costs for the same product they were receiving before. Just because the method of transportation became more expensive, doesn’t mean the value of the product should increase. This is almost a guaranteed way to lose customers.
* A business should focus on increasing strategic advantages. Back then, the main goal of a business was to make a good profit, but today in addition to making a profit, companies pay more attention on ‘time to market’. Project management helps in shortening the product life cycle which makes it an important force of modern business. A product life cycle of 10 to 15 years those days has been compressed to a life cycle of 1 to 3 years. It is said that a delay of 6 months in a project can cause a loss of 33% in product revenue share.