Question

The SWOT analysis compares internal strengths and weaknesses with external opportunities and threats so that management identifies areas of concern and opportunity both internally and externally to help the firm become more successful. As a result of this analysis, strategies to address and resolve strategic issues can be developed and implemented.

One of the 4 possible generic competitive strategies defined by Michael Porter is cost leadership. Cost leadership can be an effective approach where the company offers low prices on its goods or services, as long as it still provides acceptable quality and is able to attract enough customers for the product to be financially viable.

For your Discussion Question, please identify any industries where it could be difficult to implement a cost leadership strategy. Please explain the reasons for your choice

Answer 1

Industries where implementing a cost leadership strategy may be difficult include the airline industry and the technology industry.

Step-by-step explanation:

A cost leadership strategy can be difficult to implement in industries where there is intense competition and price sensitivity among customers.

One example of such an industry is the airline industry. In this industry, customers are often focused primarily on finding the lowest possible fare, and are less concerned with other factors such as service or product features. As a result, airlines that try to implement a cost leadership strategy may find it difficult to differentiate themselves from their competitors and attract enough customers to be financially viable.

Another example is the technology industry. Technology products often have high development and production costs, making it challenging for companies to offer significantly lower prices without sacrificing quality. Additionally, technological advancements happen rapidly in this industry, and companies that focus solely on cost leadership may struggle to keep up with the latest innovations and meet the changing demands of customers.