Answer to Question #308152 in Marketing for Sanyo

Question

Now that you have finished ranking your competitors and have looked at the macroenvironment and the impact that these have had on Pretty & Clean, you need to think of a strategy that will allow the company to compete and run efficiently.

There are four levels and types of strategies. Based on the factors in the business environment and your competitors, select a strategy that is most applicable and discuss four ways in which this strategy will allow you to approach the business environment factors and competition effectively. Consider how the generic strategies can be translated into a retail perspective.

Answer 1

The most suitable strategy is the Cost Leadership Strategy

A cost leadership strategy works if the company can produce its products at the lowest cost in the industry. This strategy is commonly used in markets with products that are not distinctly different from each other. They are "standard" products in a broad market, frequently purchased and universally accepted by most consumers.

The ways in which cost leadership strategy will allow the company to approach the business environment factors and competition effectively are;

a) Productivity - it will ensure that labor is used efficiently to improve productivity and increase efficiency.

b) It increases the bargaining power - it will lower the cost of production by exploiting the economies of scale. Higher volumes enable the business to negotiate lower prices from material suppliers and reduce costs for transportation.

c) Technology: Improvements in technology happen rapidly, and a company must invest in the latest innovations to remain competitive.

d) Distribution: As with technology, the methods of distribution are constantly evolving. Businesses must continuously analyze changes in distribution costs to find the lowest cost to transport their goods.