Question

A company like Wal-Mart exercises this strategy to gain and hold competitive advantage?

a) Cost leadership
b) Differentiation
c) Focus strategy
d) Integration strategy

Answer 1

Wal-Mart employs a cost leadership strategy to maintain a competitive advantage, which involves minimizing costs to offer lower prices than competitors. Economies of scale and a focus on core competencies support this strategy.

Step-by-step explanation:

The company Wal-Mart is known for exercising a cost leadership strategy to gain and maintain a competitive advantage. This strategic approach involves minimizing costs to offer products at competitive prices, which positions Wal-Mart to undercut competitors' prices, like Amazon. Industries where economies of scale are significant, a focus on core competencies, and a reputation for low prices play a critical role in the success of cost leadership strategies.

While a differentiation strategy involves unique offerings and a focus strategy caters to a niche market, these are not the primary strategies used by Wal-Mart. An integration strategy on the other hand, often combines both cost leadership and differentiation. Still, it's cost leadership that Wal-Mart is most well-known for, leveraging economies of scale, streamlined logistics, and efficient supply chain management to support its low-price model.

Answer 2

Wal-Mart utilizes a cost leadership strategy to maintain its market position by being the lowest-cost producer, ensuring low prices for consumers. Their success is attributed to efficient production, economies of scale, and a strategic focus on core competencies.

Step-by-step explanation:

The company like Wal-Mart primarily employs a cost leadership strategy to gain and hold competitive advantage. This approach centers on the company being the lowest-cost producer in its industry for a certain level of product quality. They achieve this through efficient production methods, economies of scale, bulk purchasing, and a lean supply chain.

Wal-Mart has a well-established reputation for cutting prices in response to new entrants in the market, which is indicative of a cost leadership strategy. The retail giant focuses on optimal output and pricing decisions, just like other successful businesses that have identified their core competency and stay focused on a narrow product range.

The firm's cost structure and production model have been crucial in allowing it to offer lower prices to consumers, even when considering additional factors such as shipping, which is a competitive edge that has been instrumental in its success against rivals like Amazon.