Submitted by: Submitted by benrankin
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Category: Business and Industry
Date Submitted: 11/04/2014 11:01 AM
Assignment 1
Find an entrepreneurial company that uses a cost‐based strategy, one that uses a differentiation strategy, and one that uses a focus strategy. With evidence from each company and material from Chapter 3, explain why you identified the particular strategy for each company. (Suggested length: 500 to 600 words)
Question 1
Find an entrepreneurial company that uses a cost‐based strategy, one that uses a differentiation strategy, and one that uses a focus strategy. With evidence from each company and material from Chapter 3, explain why you identified the particular strategy for each company.
Cost-based strategy: Walmart
A cost-based strategy as defined in the book Small business Management is a strategy that “requires a firm to be the lowest-cost producer within the market”(Longenecker, Petty, Palich, & Moore, 2010)
Though Walmart might not be the first thought that comes to mind regarding an entrepreneurial company, they started from a one store operation over 50 years ago and have grown year over year by staying on the cutting edge of the market. They have implemented a cost-based strategy from the beginning and improved it as their market share has grown.
By reducing the costs of operations through efficient business management systems, low-cost labor and incredible buying power, Walmart has implemented cost-based systems as a primary core strategy (Walmart annual report, 2013). This strategy is also pointed out in a SWOT analysis completed by strategicmanagemeninsight.com. The analysis explains how Walmart’s cost leadership strategy and a no frills service approach has helped them become “the low cost leader” in the market (“SWOT analysis of Walmart,” 2013).
Differential-based strategy: McNaughton-McKay Electrical Company
A Differential -based strategy as defined in the book Small business Management is “a plan of action designed to provide a product or service with unique attributes that are valued by the consumers” (Longenecker et...