Concepts Quiz

ConceptsQuiz

ConceptsQuiz

Differencebetween business strategy and corporate strategy

Businessstrategies are identified to give a business an advantage onmarketing a specific product. The decisions that are made to createand maintain the competitive advantages of a product are the businessstrategies in the particular company. For example, in the Memoryindustry, the decision by the competing Chinese firms to sacrificeprofits with the intent of gaining a market share is a businessstrategy because it involved identification and maintenance of atarget market. On the other hand, the Corporate strategy is concernedwith increasing the range of products to create a brand whoseproducts are reliable and this aid in the marketing of all productsunder the same brand. The decision by Samsung to enter into differenttechnology Productions is a corporate strategy.

Explanationof porter’s attractiveness of the industry

Theattractiveness is in the perspective of a firm outside the industry.The porter’s five forces model evaluates the effects of conditionsthat create the outlook of conditions approaching perfectcompetition. In the conditions, the profit margins are reduced to theminimum by the need to stay competitive in the business. Therefore, anew entry in the industry would be unattractive because the existingconditions already contain established business and entry would forcethe new player to adjust the prices. For example, in the MemoryIndustry, the new Chinese players had to reduce their prices to gaina market share because of the competitiveness of the industry.

Responseto the success of Two Buck Chuck’s strategy

Thetwo-buck strategy lowered the prices of wine and targeted increasedsales to reduce the profit deficits. In other words, the profitmargins remain the same because the market-share increases and thevolume of sales increase accordingly. Therefore, the established wineseller faces the competition of cheaper wine in the market and has toadjust to survive. Therefore, as a traditional wine seller, the bestapproach would be a reduction of prices or offering value for money.For example, offering exclusive sales in specific locations toincrease the appeal of the wine in the traditional drinkingestablishments. The reduction in the process reduces the effect ofthe two-buck strategy in reducing the profit margins and increasessales. On the other hand, the value services such as sales inexclusive locations inspire brand loyalty and offer the brand anexclusive advantage over the two-buck product.

Samsung’sbusiness strategy in the semiconductor industry

Samsunguses the related diversification strategy in business to increase themarket share and to create the image of a reliable brand. The companyproduces many related products, ranging from laptops to smartphones.The products increase the aspect of brand identity as a leader in theelectronic industry. To a limited extent, the company uses CostLeadership strategies when competing with superior brands. Forexample, the smartphones produced by Samsung are cheaper compared tothe iPhones. The cost leadership reduces the difference caused by thedifferentiation strategy used by the major brands. Apple markets theproducts to a specific segment of the population and thus appeal tothe design attributes to captivate the target group. On the otherhand, Samsung sells more products at lower prices.

Thebest for organization structure for implementing a cost leadershipstrategy

Costleadership implies that an organization seeks to reduce the prices ofthe products to gain a market share. The best organizationalstructure for the cost leadership is the functional structure of asmall organization. The functional structure has different branches,each concerned with the production of a particular product for thecompany. Therefore, it reduces the costs of operations andconsequently translates it reduced costs of production for theproducts. Therefore, the functional structure creates the necessaryconditions to reduce the costs of the products. Where theorganization is big and multinational, the matrix structure is bestfor the cost leadership strategy because it allows for functionaldivisions that serve the same purpose.