Myself

OVERALL COST LEADER

An overall cost leader will attempt to be the low-cost producer in both segments of the market. It will have good profit margins on all sales while keeping prices low for price-sensitive customers.

Firm Profile:

„X More likely to reposition products than introduce new ones to the market

„X Capacity improvements are unlikely to be undertaken (may run overtime instead)

„X Automation may be pursued to increase margins

„X Investments will be financed with debt and/or stock issues

„X Tends to spend less on promotion and sales

„X Focus on Market Share, Profits, and Stock Price

COST LEADER WITH LOW TECH FOCUS

A Low Tech focused cost leader seeks to dominate the price sensitive market segments. Its aim is to set prices below all competitors ÐŽX and still be profitable.

Firm Profile:

„X Multiple product lines in the Low Tech segment

„X Invests heavily in automation

„X Spends moderately on advertising to cost sensitive customers (sales people have more than one product to pitch to prospects)

„X Investments financed with debt and/or stock issues

„X Focus on ROS, ROE, and Profits

COST LEADER WITH PRODUCT LIFE-CYCLE FOCUS

A product life-cycle focused cost leader will seek to minimize costs through efficiency and expertise. Products will be allowed to age and change in appeal from High Tech to Low Tech buyers.

Firm Profile:

„X Low R&D spending (very little repositioning & new product every 2-3 years)

„X Invests in automation early in the productÐŽ¦s life-cycle

„X Moderate spending on promotion and sales

„X Focus on ROE, ROS, and Profits

DIFFERENTIATOR

A differentiator will seek to create maximum awareness and brand equity. It wants to be well known as a maker of high quality/highly desirable products.

Firm Profile:

„X High R&D spending to keep products fresh

„X Maintains a presence in both market segments

„X Spends heavily on advertising and sales to create maximum awareness and accessibility

„X Prices tend to be higher

„X Focus on Market Share, Profits, and Stock