Q2//Advise the manager of the shop you have chosen on what they can do to maintain a competitive advantage against their competitors.

Answer:

Things they can do to maintain a competitive advantage against their competitors:

Cost Leadership: In a cost leadership strategy, the objective is to become the lowest-cost producer. This is achieved through large-scale production, where companies can exploit economies of scale.

If a company is able to utilize economies of scale and produce products at a cost lower than that of its competitors, the company is then able to establish a selling price that is unable to be replicated by other companies.

Differentiation: In a differentiation strategy, a company’s products or services are differentiated from that of its competitors. This can be done by delivering high-quality products or services to customers or innovating products or services.

If a company is able to differentiate successfully, the company would then be able to set a premium price on its products or services.

Focus:In a focus strategy, a company focuses on a narrow target market segment. This strategy is successful if the company is able to successfully create products/services that can cater to these customers. The focus strategy also has two variants;

• Cost-focus: Lowest-cost producer in a narrow market segment
• Differentiation-focus: Differentiated products/services in a narrow market segment