1-45 The type of strategy that these companies follow is differentiation because they are not the cheapest option within their industry. These companies are effective with this strategy because in their industry they have a focused market of people who don’t mind spending more money for an item that functions practically the same. Their items do offer unique features thought that can justify the higher prices. They also offer the buyer the higher status because they can afford the higher priced items. They are differentiating because they also offer their lower priced items in the $30,000 price range but is still a higher priced car compared to others. This helps open their market share up because almost all of their other cars are priced over $50,000. I think this will work for these companies because they will gain more sales from people who want the car but can’t afford the top line items.
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He wants to beat the competition with both low cost and high customer service. If the high quality customer service goes down they will lose customers. They were also able to grow from one store to five stores with a limited product line while still making money.
2. Yes, I think their pricing and employee incentive support the company’s strategy. The hopes of this strategy are that they will gain more market share rather than making more money off each sale. The larger market share will provide enough profit with their 8% markup.
Chapter 2
2 – 47 Fowler Farm’s strategy would be cost leadership. The industry they’re in is commodity based and the price people will pay depends on how the market is for that specific commodity. They will be able to increase profits and help offset the poor commodity pricing by optimizing their processes and really looking into their financials to find cost management ways to save money.
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Strengths
• 1000 acre