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Strategic Marketing Management: Doc

   

Added on  2021-06-17

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STRATEGIC MARKETING MANAGEMENTSTUDENT NAMENAME OF THE INSTITUTE

STRATEGIC MARKETING MANAGEMENTAssignment 1Porter’s generic strategiesMichael porter has developed generic strategies stating the 3 ways in which an organization cancompete with its competitors to provide customer satisfaction. These 3 ways are cost leadership,product differentiation and Focus.Examples of companies using cost leadership are Walmart, South west Airlines, IKEA,Tesco. These companies have achieved highly efficient internal business processes, useseconomies of scale and thus able to sell the material at a lower cost than the market andstill able to make decent profit margins as they has reduced the costs of running businessSome of the organizations that have adopted differentiation approach are Zara, Google,Facebook, Apple as their products and services are quite unique in the market (Haley, &Boke, 2014). These organizations have the products that looks superior to competitorsand also deliver more value. For instance, there are large number of search engines butundoubtedly Google retrieves the most accurate results. Apple mobile phones havedifferent look and feel and thus they look more attractive as compared to Samsung’smobile phones Some of the organizations that are focus are McDonald’s, Boeing, Pepsi co, High endhotels like four seasons. These organizations have identified very niche markets and fullyconcentrate their resources to fulfill the needs of that market and thus are quite focusedBowman’s strategy clock modelThis model is the successful adaptation of the porter’s generic strategies model after the portermodel was criticized for its non-flexibility and non-explanation about stuck in the middleapproach followed by the organizations. This model was also used by the organization whiledefining their business strategy and compare its position with those of competitors in terms ofthe products and services. As per porter, organizations can be either follow cost leadershipstrategy or differentiation however there are different combinations of cost leadership and

STRATEGIC MARKETING MANAGEMENTdifferentiation that different organization can follow (Hodgkinson, 2015). Bowman added moredetails into porter model and defined 8 strategic options that organizations can follow. They areas follows:Position 1: Low price and Low perceived valueCompanies do not want to operate in this segment however some products have becomecommodities and consumers do not care about any other attributes of the product except theprice. Companies in this segment sustain by keeping their volumes high without giving anythough to differentiation and customer loyalty.Position 2: Low priceOrganizations that operate in this category are cost leaders like Walmart and South west Airlines.These companies exploit economies of scale and thus able to thrive even when their margins perproducts are very low. Such companies needs to have large volumes to sustain. Some newcomers also enters in this area which triggers a price war but as volume is not large, theyeventually shut down (Ceptureanu, 2016).Position 3: Hybrid (Moderate price and Moderate perceived value)Organizations that operate in this area offers products and services at a low price but theirproducts have higher perceived value that other low cost competitors. IKEA follows thisstrategy. Costco supermarket also follow this strategy where you will find only few brands of theparticular product as against products but all those brands have high turnover.Position 4: DifferentiationOrganizations in this segment offers unique products and services to the consumers and thuscommands a high price because their perceived value is much higher. Zara, United Colors ofBenetton, Nike, Adidas operate in this segment.Position 5: Focused DifferentiationOrganizations in this segment offers products and services for very niche groups Like Armani,Rolls Royce and thus commands high price due to high perceived value of the products andservices.Position 6: Risky High marginsThis strategy of high margins without much perceived value is not sustainable because it willsoon be discovered in competitive market and customers will no longer buy the products withsimilar perceived value as low cost products but much higher price.

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