Cost reduction strategies adopted by different companies have different benefits and drawbacks. Multidomestic strategy presented Philips with many challenges: high costs due to tailored products and duplication across countries. Global strategy presented Matsushita with the following challenges: y Problem of strong yen y Too much dependency on one productthe VCR y Loss of non-asian employees because of glass ceilings.
Cost reduction strategies adopted by different companies have different benefits and drawbacks. Multidomestic strategy presented Philips with many challenges: high costs due to tailored products and duplication across countries. Global strategy presented Matsushita with the following challenges: y Problem of strong yen y Too much dependency on one productthe VCR y Loss of non-asian employees because of glass ceilings.
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Cost reduction strategies adopted by different companies have different benefits and drawbacks. Multidomestic strategy presented Philips with many challenges: high costs due to tailored products and duplication across countries. Global strategy presented Matsushita with the following challenges: y Problem of strong yen y Too much dependency on one productthe VCR y Loss of non-asian employees because of glass ceilings.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
O is a company that followed a mume egy resulted in: {nnovation from local R&D întrepreneurial spirit Oroducts tailored to individual countries igh quality due to backward integration
The multi-domestic strategy also presented Ohilips with many challenges:
igh costs due to tailored products and duplication across countries
The innovation from the local R&D groups resulted in products that were driven instead of market driven Decentralized control meant that national buy-in was required before introducing a product-time to market was slow.
¦mung is a company that targeted:
The high-efficiency cell space but instead of offering a premium priced
product, {t has focused on tapping into its LCD and semiconductor processing knowhow to produce high-efficiency cells at low cost. Samsung îlectronics may not be in a rush to enter the thin-film market just yet, but its move to produce high-efficiency cells at low cost is a major disruptive move. Samsung is noted in the semiconductor industry as an aggressive driver in manufacturing cost reduction and invests heavily in new process technologies and manufacturing capacity to be the lowest cost provider.
atsushita is a company that followed a g egy. The strategy resulted in:
Strong global distribution network
Company-wide mission statement that was followed closely inancial control ore appliesd R&D 0bility to get market quickly and force standards since individual country buy-in was not necessary.
The global strategy presented atsushita with the following challenges:
Oroblem of strong yen
Too much dependency on one product- the VCR Loss of non-0sian employees because of glass ceilings
Ferrari and Rolls-royceadopted u strategy that:
provides the company the possibility to charge a premium price for superior quality (differentiation focus) or by offering a low price product to a small and specialised group of buyers (cost focus). They are the niche players in the automobile industry. Both these companies have a niche of premium products available at a premium price. oreover, they have a small percentage of the worldwide market, which is a trait characteristic of niche players. The downside of the focus strategy, however, is that the niche characteristically is small and may not be significant or large enough to justify a company͛s attention. The focus on costs can be difficult in industries where economies of scale play an important role. There is the evident danger that the niche may disappear over time, as the business environment and customer preferences change over time. cDonalds used the strategy of
e enn for reducing its cost: èhen a company differentiates its products, it is often able to charge a premium price for its products or services in the market. Some general examples of differentiation include better service levels to customers, better product performance etc. in comparison with the existing competitors. îxtra costs may include high advertising spending to promote a differentiated brand image for the product, which in fact can be considered as a cost and an investment. Differentiation has many advantages for the firm which makes use of the strategy. Some problematic areas include the difficulty on part of the firm to estimate if the extra costs entailed in differentiation can actually be recovered from the customer through premium pricing. oreover, successful differentiation strategy of a firm may attract competitors to enter the company͛s market segment and copy the differentiated product .
Ryan0ir and îasyjet in 0irlines, and 0SD0 and Tesco, in
superstores used ee as its strategy to reduce its cost: The companies that attempt to become the lowest-cost producers in an industry can be referred to as those following a cost leadership strategy The company with the lowest costs would earn the highest profits in the event when the competing products are essentially undifferentiated, and selling at a standard market price. The company can for instance charge an average price while following the low cost leadership strategy and reinvest the extra profits into the business. The risk of following the cost leadership strategy is that the company͛s focus on reducing costs, even sometimes at the expense of other vital factors, may become so dominant that the company loses vision of why it embarked on one such strategy in the first place.