Management Essay Example | Topics and Well Written Essays - 500 words

Management - Essay Example Typically low cost leadership and differentiation strategies are implemented independently. The reason this occurs is because the two strategies have a different focus. A low leadership strategy persuades customers by offering the best price. Everyone loves to purchase a bargain. The implementation of a low cost leadership strategy can be used by corporations in order to increase their market share. The differentiation strategy is different because since the firm wants to become different in some aspect this typically implies offering a premium product. Products that are differentiated can be sold at higher prices in the marketplace. Despite the differences between the cost leadership strategy and a differentiation strategy it is possible to implement both simultaneously. Companies that are able to implement a cost leadership with differentiation are using a hybrid strategy. It is difficult to achieve, but under certain circumstances the hybrid strategy can be used. A perfect example of a company that can achieve a cost leadership with differentiation is a firm that operates in a monopoly marketplace. The lack of competition gives the monopolist lead way into the price structure that the firm implements. An important thing to remember about cost leadership is that the lower prices are relative to the market for similar products.