MG 495 Unit 4 Discussion MG 495 2022/2023

MG 495 Discussion Week 4 From Chapter Six: Q1 - What industry forces might cause a propitious niche to appear or disappear? The text describes a propitious niche as a unique market opportunity that is available only for a particular time (Wheelan, Hunger, Hoffman, & Bamford, 2010, p. 167). A company will create a niche by focusing a business at a specific customer. I found an article at F that discussed the benefits of a niche “rather than trying to appeal to the masses, when you narrowly focus your business to appeal to a certain segment, you benefit in a number of ways: premium prices, lower costs to acquire customers, and the opportunity to become the go-to company in your niche” (Gaudet, 2014). An industry force that might cause a propitious niche to disappear is a change in the environment. The impact of an environmental change could come in the form of a company that continues to produce its particular product or service but the market demand changes. The company may fail to keep up with changing technology, and the customer will usually want the latest and greatest product. A company may help make a propitious niche appear by being the best at what they do. “Volvo Trucks has grown to become the world’s second-largest heavy duty truck brand in the world and employs over 19,000 people across the globe. They’ve done this by producing high-quality trucks, but they have also mastered the art of content marketing” (Gaudet, 2014). Q2 - What does a business have to consider when trying to follow a cost leadership strategy and a differentiation strategy simultaneously? Can you name a company doing this? The text describes the two strategies as “a cost leadership strategy is the ability of a company or a business unit to design, produce, and market a comparable more efficiently than its competitors. A differentiation strategy is the ability of a company to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service” (Wheelan et al., 2010, p. 169). When a business decides to follow both strategies simultaneously they would need to consider the company’s ability to achieve differentiation and low price relative to competitors. “This success strategy depends on the ability to deliver enhanced benefits to the customers with low price while achieving sufficient margins for reinvestment to maintain and develop bases of differentiation” (Baroto, Abdullah, & Wan, 2012, p. 124). Ikea is a company that follows both strategies simultaneously. The company based in Sweden, produces furniture by offering cheap but stylish furniture. It has been successful with a combined strategy