The Coca Cola Company has been using a broad differentiation strategy to compete in the American soft drink industry for the last decades. Losing the perceived customer quality differentiation is devastating to this strategy. Q4. Sara Lee’s Cookie Crumbles – 2 Business Units Survive, Starbucks – Pursues a Broad Differentiation Strategy. Below we illustrated a few examples in relation to an often differentiated product – women’s handbag. Businesses looking to build a broad or focused differentiation strategy will need to produce or design extremely unique or distinctive products or services that create increased value for the consumer. Based on this information. Training programs must be comprehensive to support the customer service differentiation but can be expensive. Advantages and disadvantages of Coca cola joint ventures for diversification. Cost leadership strategyis vulnerable to the risks, such as relying on scale or experience as entry barriers. They are well-positioned in the market with a plentiful amount of easy to access stores. Many (perhaps all) market segments in the industry are supplied with the emphasis placed on minimising costs. Then, by achieving the lowest possible cost, the leader can place their team or organization into a position where the lowest price in the market is charged for needed goods or services. Differentiation Strategy Prof. (Dr.) Nitin Zaware Prof. (Dr.) Nitin Zaware 1 2. Cost Leader. The idea here is simple. Advantages and Disadvantages of Differentiation. Buyer loyalty is … As mentioned above, Porter suggested either of the three strategies to survive in a competitive business. Competitive Advantage cannot be fully understood by considering an organisation in general. Some of thes… Diversification is a form of corporate strategy designed to improve opportunities for growth and profitability. The Coca Cola Company has been using a broad differentiation strategy to compete in the American soft drink industry for the last decades. The goal is to produce goods or services at the lowest possible cost by organizing every potential resource around the current production methods. a) Please provide a very detailed analysis of the Coca Cola company’s resources and capabilities. Perhaps Starbucks most impactful strategy is the time, effort, and financial resources that are invested into its employees – or partners as Starbucks has eliminated the word employees from its vocabulary. Please do the following, a) Discuss all the General Segments of the Environment and the Five Forces Model to analyze the external conditions affecting the Coca Cola Co in the US market. Broad Differentiation Strategy . Difficulty in the pricing of goods that are not new into the market. Competitive Strategy is about applying offensive or alternatively defensive actions to create a advantageous position within marketplace, with a purpose to deal with issues effectively with competitive forces in addition to come up with a much better return on investment.. The traditional method to achieve this objective is to produce on a large scale which enables the business to exploit economies of scale. Vertical differentiation refers to products that fall on a scale from best to worst, highest to lowest, impacting the overall functionality of the item. Tougher Work Load for Teachers Working with each individual according to his learning style means more work for the teacher, more time taken for each lesson and each child. In 2007, department store Dillard’s stopped carrying men’s sportswear made by Nautica because the seafaring theme of Nautica’s brand had lost much of its cache among many men. Advantages and Disadvantages of Product Differentiation. One of the main criticisms to the Resource Based View of the Firm is that companies cannot obtain sustainable competitive advantages because of competitor’s reactions and attacks that erode advantages depending on the market cycle [slow or fast] that the company is competing. Remember, I have offered this set of essays for several years and I have been able to get a consistent perspective on what I am looking in the answers and with the rubric that I use, it is possible to assign a grade in about 10-15 minutes. Copyright © 2021 A+ Professional Essay Writing Services:- All rights reserved. A strategy directed toward creating something that is perceived as being unique. Starbucks serves a market that is defined by coffee drinkers. 2.   In a differentiated classroom, teachers recognize that all students are different and require varied teaching methods to be successful. Broad differentiation is a strategy that is applied across an industry, appealing to a broad range of shoppers. Starbucks has secured a competitive advantage with its unique, yet diversifying product offerings. Companies can engage in diversification efforts by different means [mergers, acquisitions, joint ventures, strategic alliances, or international expansion]. Examples of Firms Pursuing a Differentiation Strategy ... strategy means that a firm is competing based on uniqueness rather than price and is seeking to attract a broad market (Porter, 1980). These are the target market (broad or narrow) and competitive advantage (low cost or differentiated). As editors of the Wiley Encyclopedia of Management 3e, Vol. The advantages and disadvantages of the cost leadership styles show us that this process can be used to create a unique competitive advantage. Despite the stagnant growth in the industry, its leading brand, Coke, remains the market leader and it can be considere8i9d as a cash cow for the company. Advantages Of Product Differentiation. His expectations in return are to retain employees (reducing training and turnover expenses) and generate revenue (through customer satisfaction). The corporate strategy in these cases is about the basic direction of the firm as a whole. advantages and disadvantages of differentiation strategy pdf. This strategy is concentrated on a broader segment of the total market. The focus strategy is one of three generic strategies that Professor Porter created at the time: cost leadership, focus, and differentiation. A broad differentiation strategy: Trying to differentiate different ways of delivering company products from competitors that will appeal to a wider range of customers [Some examples are Nordstrom (known for customer service policies and staff) and Whole Foods (emphasis on health foods and organic groceries)