In APA format - Pick and write about one company that uses each of the following
ID: 428529 • Letter: I
Question
In APA format - Pick and write about one company that uses each of the following competitive strategies, for a total of three different companies:
Cost leader, differentiator, and integrated cost/differentiator. Clearly explain why you know they use such a strategy and how it works. (1-2 paragraphs each).
Then, talk about the credit card industry, in terms of life cycle. Where is it in the life cycle framework? Where do you see growth coming from in the credit card industry in the next 5 years? (1 page).
Support all your arguments with proper references
Explanation / Answer
A company, which is a great example of cost leadership strategy is Carrefour. Carrefour is a retailer company based in Egypt. Carrefour is known for its low price products. This low pricing policy is a major hit among the masses and Carrefour has the image of offering the best-quality products for the lowest prices. This is simply cost leadership. Moreover, the company is able to sustain its low pricing policy because of its ability to levy pressure on the suppliers to offer it products with deep price cuts.
Apple can be considered as the best example of a brand offering differentiated products. The various product offerings like iPad, iPhone, etc has always been elite’s favourites. Apple uses the product differentiation strategy by tapping on the unseen and unaddressed technology and consumer needs. The differentiation strategy is also focused on the product design, which has made Apple products, quite synonymous to high-class products.
Integration of cost leadership and differentiation strategy is called a hybrid strategy. A famous company offering the same is Zara. Zara uses the value chain system to offer quality products to its consumers. Zara has also leveraged on vertical integration to support its hybrid strategy. The vertical integration has facilitated the company by providing it with high frequency information about its customers and market feedback.
In my views, credit cards are now witnessing the product maturity stage where they are trying to maximize the business profits by defending market share or through poaching system from competitor. The credit card companies try to defy competition by offering competitive interest rates and a basket of benefits. Though there is extensive product availability in this market space, the companies do try to strive hard to offer stiff competition and retain their shelf space.
In the next 4-5 years, the credit card companies will try hard to maintain its position in the maturity stage. They will be on the verge of entering the decline stage. With the arrival and growing popularity of the digital payment options like Lazypay, Paytm, etc. the credit card companies will face a tough time to maintain its market hold. They need to try to maintain their price level at a competitive rate so as to claim its market hold. Customers will be offered with various paying benefits apart from the regular benefits program. The credit card companies will try to hold on their customers through various loyalty programs.
Once the credit card companies enter the decline stage, the prices of the product would stabilize at a very low level. Companies will try and get rid of the unpopular products and will try to maintain focus and market hold with the most popular products.
https://www.creditcards.com/credit-card-news/infographic-life-cycle-credit-card-1701.php
https://www.pivotalpayments.ca/blog/credit-card-processing/3-stages-of-a-credit-card-transaction-cycle
https://study.com/academy/lesson/maturity-stage-of-the-product-life-cycle.html