Discussion 4
1. What industry forces might cause a propitious niche to appear or disappear?
By definition a propitious niche is “a portion of a market that is so well suited to a firm’s internal and
external environment that other corporations are not likely to challenge or dislodge.” (Wheelen,
Hunger, Hoffman & Bamford, n.d.pg G-8) Something that could cause a propitious niche are
environment or industry changes. In instances where the size of the market changes (external factor)
but the company keeps producing its services or products. Companies have to take advantage of the
opportunities when they arise to fill a niche. Unfortunately, if a company cannot produce as much as
the market is demanding or attain more money to support the growth in the industry (internal
factor) that could be damaging and that’s when a propitious niche could disappear.
2. 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?
When trying to follow a cost leadership strategy or a differentiation strategy they have to plan it
carefully. The business has to find a niche in the market and strategize their products or services,
determining their prices, in order to have a cost leadership position in that niche market. After the
business has decided their price point they need to strategize which of their products they can add
additional value to so that they will be different than their potential competitors that might be in the
same price range. One company that comes to mind that does this is Walmart. They’ve managed to
keep their operating costs low and in turn they can keep the price of their products low.
1. What industry forces might cause a propitious niche to appear or disappear?
By definition a propitious niche is “a portion of a market that is so well suited to a firm’s internal and
external environment that other corporations are not likely to challenge or dislodge.” (Wheelen,
Hunger, Hoffman & Bamford, n.d.pg G-8) Something that could cause a propitious niche are
environment or industry changes. In instances where the size of the market changes (external factor)
but the company keeps producing its services or products. Companies have to take advantage of the
opportunities when they arise to fill a niche. Unfortunately, if a company cannot produce as much as
the market is demanding or attain more money to support the growth in the industry (internal
factor) that could be damaging and that’s when a propitious niche could disappear.
2. 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?
When trying to follow a cost leadership strategy or a differentiation strategy they have to plan it
carefully. The business has to find a niche in the market and strategize their products or services,
determining their prices, in order to have a cost leadership position in that niche market. After the
business has decided their price point they need to strategize which of their products they can add
additional value to so that they will be different than their potential competitors that might be in the
same price range. One company that comes to mind that does this is Walmart. They’ve managed to
keep their operating costs low and in turn they can keep the price of their products low.
