Six Basic Strategies
- Broad Cost Leader
- Broad Differentiator
- Niche Cost Leader
- Niche Differentiator
- Cost Leader with Product Lifecycle Focus
- Differentiator with Product Lifecycle Focus
Note: Your Strategy Should Dictate Your Tactics
A Broad Cost Leader strategy maintains a presence in all segments of the market. The company will gain a competitive advantage by keeping R&D, production and material costs to a minimum, enabling the company to compete on the basis of price, which will be below average. Automation levels will be increased to improve margins and to offset second shit/overtime costs.
A Niche Differentiator strategy focuses on the high technology segments (High End, Performance and Size). The company will gain a competitive advantage by distinguishing its products with an excellent design, high awareness, easy accessibility and new products. The company will develop an R&D competency that keeps designs fresh and exciting. Products will keep pace with the market, offering improved size and performance. The company will price above average and will expand capacity as it generates higher demand.
Report Write Up/Format
- First (Short) Paragraph Summary of the Article (5 Points )
- Next Paragraph: Discuss Few Strength and Few Weakness (Internal to the Company; 10 points)
- Highlight Core Competence (5 points)
- Next Paragraph: Discuss Few Opportunity and Threats (Based on the Changes in the Environment. Conduct PEST Analysis or Apply Porter Model; 10 Points).
- Problem Statement
- State What is the Purpose of the Critical Analysis? Conceptually it is About “How Should Company X Compete in Y Market? Also State Financial Goals to Achieve From Implementing the Proposed Solution. (5 Points)
- Propose and Describe Alternatives (at least two) to Address the Problem and to Achieve the Goal/ Objective Stated in the Problem Statement. (10 Points)
- Either: Strategic Alternatives (which strategy to pursue: e.g. broad cost leader, niche differentiator etc. read the six basic strategies below)
- or Tactical Alternatives (state the strategy the company is pursuing and then describe tactical options such as changes in R&D, marketing, production and finance Decisions).
- Note: You Can Propose to Enter a New Market/Introduce New Product. However, you still need to suggest Strategic/Tactical Alternatives to Compete.
- Evaluate Solutions and Recommend an Option
- Choose the Solution Where Company Can Differentiate Through Core Competence.
- Describe Why Did You Chose This Solution (10 Points)
- Describe how to implement the recommended option. Use/Apply Tactics Described in Section 12 of Capsim Users Guide (10 Points)
- Identify Segments and point out which segment to target (10 points).
- Tracking Metrics
- Intermediate Metrics: How would you verify that all the tactics to be implemented for the proposed strategy are carried out?(15 Points)
- Conclusive Metrics: How would you verify that financial goal stated in the problem statement is achieved? (5 Points)
- Take Away (5 points)