![]() ![]() Papa Murphy’s targets its inexpensive take-and-bake pizzas at value-conscious families. Redbox rents DVDs and video games through vending machines for only $1. Table 6.6 Focused Cost Leadership Example of Firms Pursuing a Focused Cost Leadership Strategy Several examples of firms pursuing a focused cost leadership strategy are illustrated below. But among firms that rent actual DVDs, Redbox offers unparalleled levels of low price and high convenience.įirms that compete based on price and target a narrow market are following a focused cost leadership strategy. There are ways to view movies even cheaper, such as through the flat-fee streaming video subscriptions offered by Netflix. Redbox, for example, uses vending machines placed outside grocery stores and other retail outlets to rent DVDs of movies for $1. Instead, it charges low prices relative to other firms that compete within the target market. A firm that follows this strategy does not necessarily charge the lowest prices in the industry. A focused cost leadership strategy requires competing based on price to target a narrow market (Table 6.6). The Nature of the Focus Cost Leadership Strategy Figure 6.7: Redbox machines are available nationwide.įocused cost leadership is the first of two focus strategies. These latter strategies are known as focus strategies (Porter, 1980). These efforts to appeal to broad markets can be contrasted with strategies that involve targeting a relatively narrow niche of potential customers. 6.5 Focused Cost Leadership and Focused DifferentationĬompanies that use a cost leadership strategy and those that use a differentiation strategy share one important characteristic: both groups try to be attractive to customers in general. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |