Choose the Best Strategy Objective: To analyze an opportunity and determine whic
ID: 413564 • Letter: C
Question
Choose the Best Strategy Objective: To analyze an opportunity and determine which generic strategy would be most fitting
Task: For each of the scenarios below, choose the strategy that you believe should be pursued to achieve the best results, and provide a brief explanation of why you believe this is the best strategy.
5 Generic Strategies 1. Low-Cost Provider Strategy
2. Broad Differentiation Strategy
3. Focused Low-Cost Strategy
4. Focused Differentiation Strategy
5. Best-Cost Provider Strategy
Scenarios: 1. A new waterfront development project is beginning in a medium-size city. This project will include moderate to higher-end shopping, restaurants, and hotels. Some of these businesses include: Pottery Barn, Ann Taylor, an Apple Store, Sasha’s Dress Boutique, Apostrophe, Bose, Calvin Klein, Cheesecake Factory, Capital Grille, Maggiano’s, the Marriott, and the Westin. The spaces will include a mixture of national chains, and local businesses. The project and the city have been highlighted in national papers for the expected success of the project and renewed attraction to the city. The Sully Hospitality group is determining if they want to open a boutique hotel in this area. What strategy should Sully adopt to develop the type of boutique hotel would bestfit this project? Provide a brief explanation.
2. A new shopping center is being developed – the main anchors are Wal-Mart and Home Depot. The other parcels will include smaller establishments of fast-food and other convenience category businesses. McDonald’s is interested in this project but has to determine how they would approach this location.
The options are: 1. Put a McDonald’s Express inside the Wal-Mart
2. Purchase an out-parcel at the front of the project with high traffic volume and build a traditional McDonald’s
3. Purchase an out-parcel at the front of the project with high traffic volume and build a McCafe Which generic strategy should be McDonald’s use to guide this decision? Based on the generic strategy that you believe is most appropriate for this scenario, which option should McDonald’s choose? Provide a brief explanation. 3. The airline industry has seen various players attempt all of the generic strategies. Given the current state of the airline industry and the main surviving airlines, if a company wanted to get into this industry right now, which strategy would promote the best chances for success? Provide a brief explanation.
4. The top five selling brands of tablets in the world are: 5. Acer, 4. Dell, 3. Sony Vaio, 2. Lenovo, and 1. Apple. A new start-up company wants to break into the tablet market; what generic strategy should they adopt? Provide a brief explanation.
Explanation / Answer
(1)
[Focused Differentiation]
The hospitality group will face prospective consumers and observers as the middle to a high-end group who are prone to visiting the waterfront project area. The asset must be in accordance with the taste and preference of this particular group and thus must not be broad. It is differentiation due to the very nature of the business carried out. Its a boutique hotel meant for a particular theme and offering. Thus the best-suited strategy is focused differentiation.
(2)
[Focused low-cost]
Based on the nature of customers visiting Walmart, the overall demand will be for low-priced products. People coming to the shopping center will either go Walmart or Home Depot. Home Depot has nowadays changed its generic strategy to broad differentiation. So, McD, keeping its store outside at the front will face a mixed customer pool. A better option is to situate the store inside the Walmart and attract only a customer group who prefer low-cost offerings. So, the suited strategy is focussed low-cost with the first option being explored.
(3)
[Low-cost provider]
A broad low-cost provider is required in this case for the primary need of most of the passengers in US airline industry is a low-price fare. There are many short-distance travels happening for which extensive differentiation or value-based strategy is not required. Primarily, a low fare and timely arrival/ departure are valued by the passengers.
(4)
[Best cost provider]
The company cannot compete with these competitors with value-based strategy due to the intangible benefits provided by these competitors for their high brand value which they have developed over time. Therefore, the cost leadership strategy should be taken. The customers will look out for products having the similar features as that of the known brands and still having a very low price from a new player. So, the most suitable strategy is the best cost provider strategy.