Posted October 11th, 2020. Q1. Many consumers perceive the product as equivalent to alternative products offered in the marketplace at a lower price. Please do the following, a) Discuss the advantages and disadvantages of all these different means to achieve diversification. differentiation strategy A business strategy in which a company tries to gain a competitive advantage by providing a unique product or service, or providing a unique brand of customer service. Continued innovation and quality improvement a… Coleman camping equipment offers a good example. The Coca Cola Company has been using a broad differentiation strategy to compete in the American soft drink industry for the last decades. The traditional method to achieve this objective is to produce on a large scale which enables the business to exploit economies of scale. Q1. The differentiation strategy is closel His expectations in return are to retain employees (reducing training and turnover expenses) and generate revenue (through customer satisfaction). 1. b) Provide a summary of potential opportunities and threats to the Coca Cola Company as the current CEO will use your analysis to develop a new strategic management process for the company’s operations in the US. There could be small businesses or involved in a single business or a large, complex and diversified conglomerate with several different businesses. 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. Broad differentiation is a strategy that is applied across an industry, appealing to a broad range of shoppers. The corporate strategy in these cases is about the basic direction of the firm as a whole. Advantages and disadvantages of Coca cola joint ventures for diversification. These are the target market (broad or narrow) and competitive advantage (low cost or differentiated). A firm must have strong marketing capabilities and effective quality assurance. Some of thes… b) Use the key criteria [rare, valuable, costly to imitate, and non-substitutable] to determine if Coca Cola has competitive parity or temporary competitive advantage in the soft drink industry. These categories are: Starbucks employs a broad differentiation strategy. The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. 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) 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. This strategy is concentrated on a broader segment of the total market. Product differentiation occurs on two clear levels: vertical and horizontal. Starbucks target market is large enough to offer continued growth potential and attractive profits. 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. Advantages Of Product Differentiation. Copyright © 2021 A+ Professional Essay Writing Services:- All rights reserved. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. Large companies strive to differentiate their cereal brand as a higher quality than cheaper cereals. In this post I’m going to be focusing on differentiation, but it is important to understand why differentiation is a strategy and how it relates to competitive advantage. The Coca Cola Company has been using a broad differentiation strategy to compete in the American soft drink industry for the last decades. Below we illustrated a few examples in relation to an often differentiated product – women’s handbag. This strategy is concentrated on a broader segment of the total market. The big risk when using a differentiation strategy is that customers will not be willing to pay extra to obtain the unique features that a firm is trying to build its strategy around. A strategy directed toward creating something that is perceived as being unique. AVOID buying essays online or even googling for Coca Cola SWOT\’s or other blogs/strategic aspects as the worst thing that you can do is get a fail score in this comprehensive exam. 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. Starbucks has secured a competitive advantage with its unique, yet diversifying product offerings. Types of Strategies – Cost Leadership ,Differentiation , Focus. Each generic strategy offers advantages that firms can potentially leverage to enjoy strong performance, as well as disadvantages that may damage their performance. These categories are: Starbucks employs a broad differentiation strategy. Differentiation strategies have … To successfully employ this strategy, Starbucks provides differentiated quality and service in the coffee sales and shop industry while diversifying their offerings to include: a variety of coffee product sales outside their stores through partnership with PepsiCo, Starbucks brand liqueur through partnership with Jim Beam, food and merchandise sales, and other acquisitions such as Tazo tea. 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. Q4. The Disadvantages of Differentiated Marketing. The idea here is simple. Difficulty in the pricing of goods that are not new into the market. The different factors on which the process is implemented include: A focused cost leadership strategy requires 2. On the other hand, there are disadvantages to using broad differentiation strategy, such as not meeting customers' expectations of unique offerings or setting a premium price that is too high. Starbucks serves a market that is defined by coffee drinkers. Pursuing a differentiation strategy requires a larger financial investment from the company, another weakness. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. Advantages and disadvantages of Coca cola joint ventures for diversification. 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. Given the information that you collected in questions 1 and 2, what can be a potential blue ocean strategy for the Coca Cola Company? Other firms may out differentiate the existing firms by introducing better unique products into the market. Vertical differentiation refers to products that fall on a scale from best to worst, highest to lowest, impacting the overall functionality of the item. If the achieved selling price can at least equal (o… 1. There are several ways an organization can create a differentiation-based competitive advantage for a single product or the company as a whole. Corporate level strategy implies the notion of creating value by deciding in which businesses a company may compete. Consider cereal. Differentiation strategy 1. Advantages and Disadvantages of Product Differentiation. Many (perhaps all) market segments in the industry are supplied with the emphasis placed on minimising costs. Cost declines with cumulative volume are by no means automatic, nor is reaping all available economies of scale achievable without significant attention. Once determined, the strategy is categorized as one of the 5 Generic Competitive Strategies. Your email address will not be published. Advantages and Disadvantages of Differentiation. Advantages and disadvantages of Coca cola joint ventures to achieve diversification Order 100% Plagiarism Free Paper Now. Broad Differentiation Strategy . NRS 451VN Week 1 Assignment: Professional Resume and Cover Letter, NR510 Week 1: Barriers to Practice Discussion, Economic Growth and Education Level in China. Focused cost leadership is the first of two focus strategies. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry. Starbucks offers their partners the opportunity to purchase company stock through payroll deductions. I feel that you do not need more than this company information and your reading from the book to properly answer the questions. As a product remains in the market for longer consumers become smarter about the prices and thus the premium charges being charged can no longer be sustained. Once again, please read the questions carefully and use wisely the information placed below in the other items as you need to even time yourself (about 30 minutes per answer). The company must use only one out of three competitive strategies. Training programs must be comprehensive to support the customer service differentiation but can be expensive. Using a differentiated marketing strategy, a company goes after each distinct target market with a different product or service. Starbucks has made the organization well-known for tailoring to broad customers’ needs by preparing orders to meet customers’ wishes, no matter how detailed they are. Product differentiation means that your product has one or more distinct attributes that separate it from competitors. A differentiation strategy offers important advantages and disadvantages for firms that adopt it. Figure 5.10 image description: Executing a Differentiation Strategy. Cost leadership strategyis vulnerable to the risks, such as relying on scale or experience as entry barriers. Most famously, Starbucks offers all part-time employees that work at least twenty hours health insurance benefits, a benefit implemented by CEO Howard Schultz who watched his father struggle as an employee of companies that did not offer such benefits. I am providing the latest information from the Coca Cola Co. 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. 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. As mentioned above, Porter suggested either of the three strategies to survive in a competitive business. a) Please provide a very detailed analysis of the Coca Cola company’s resources and capabilities. broad across-the-board: broad in scope or content; "across-the-board pay increases"; "an all-embracing definition";… A Cost Leader is where the company has … Product differentiation is economically advantageous to a company. Diversification is a form of corporate strategy designed to improve opportunities for growth and profitability. Cost leadership styles focus on resource organization. Leader is where the company as a whole //www.coca-colacompany.com/company/coca-cola-system, https: //www.coca-colacompany.com/company/coca-cola-system, https //www.coca-colacompany.com/company/coca-cola-system. The industry are supplied with the emphasis placed on minimising costs strategyis vulnerable to the risks, such as on... 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