Low-Cost Leadership, Product Differentiation

Low-cost leadership, Product differentiation, Focus on market niche and Customer and supplier intimacy are four basic competitive strategies.

Low-cost leadership uses the information systems for producing goods and services at a lower price and intensifies the level of the service and quality. Manufacturing and materials management functions are the center of attention.

Product differentiation is a marketing process that shows the difference between products. By contrasting its unique qualities with competing products it makes the product more attractive. Product differentiation that is successful creates a competitive advantage for seller as the consumers view these products as the unique or superior.

Focus on market niche. First of all I want to define the market niche. It is a small but profitable market segment, suitable for the focused attention by the marketer. It do not exist by itself, it is created by the identifying needs or wants that were not addressed by the competitors. Information systems are used by focus on market niche for enabling a focused strategy on a market niche that is single and specialized. This strategy supports the information systems by analyzing and producing the data.

Customer and supplier intimacy tries to use the information systems for developing strong loyalty between the suppliers and the customers. This is a concept from the marketing and describes the ability of a supplier that becomes known and accepted as a regular partner. Better supplier knows the customer company with its difficulties and objectives; better able he/she is to make an optimal solution.

From these four strategies I have chosen low-cost leadership and product differentiation. Walmart uses the low-cost strategy and companies such as eBay, Google use product differentiation strategy. Wal-Mart achieved almost legendary status for its goods that are low-priced. It maintains efficient distribution systems, lower labor costs and the firm-level...