Many companies out there take on a specific role within their market and carve out a segment for themselves. They strive to bring about a particular business aspect, low cost, niche marketing, something specific that they can use to their advantage.
Walmart is a company that takes advantage of cost leadership. I don't believe Walmart's practices are very fair, they do take the crown as being a company that drives costs down. Not only are their prices generally lower than many existing competitors, they also reduce their in-house costs substantially. The company also has a knack for getting their suppliers to supply them at considerably lower costs. If any of you have seen the documentary on Rubbermaid...you will know that Walmart drove them into bankruptcy when Rubbermaid was unwilling to lower their selling point to meet Walmart's demands.
Sak's Fifth Avenue is a company that utilizes differentiation. The clothing in the store itself is high end and deserves the higher price tag over your regular run of the mill clothing. However, the company focuses a lot on the shopping experience itself. You practically get your own personal stylist when you enter. Of course for this service of a personal stylist, they charge a few hundred more than if you were shopping down the block at Macy's or something. It makes you wonder why people would pay the extra amount. Reason? People want the experience, don't want to go through the hassle of going through the larger crowds, and they have the money to burn.
A good focus company would be Gamestop. They're about as focused as it gets when it comes to offering a product. Like the word in their name, games is all they offer. From consoles to the computer, they have them all. Of course that's also all you will find as well. Don't expect to see computer parts, clothing, or food being served up at Gamestop. They have one focus and one focus only: Games. There's a reason why many other electronic retailers find it difficult to really sell games. It's because everyone goes to Gamestop because the employees know the games and that's all they sell.
Welp, that wraps up strategies. Follow them well and use it to your advantage. Just try not to kill a big company in the process.
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7 comments:
To many of us Sak's Fifth Avenue is not just an ordinary department store but is a brand name that symbolizes fashion and style. I totally agree with you that people would rather pay extra by shopping at Sak's Fifth Avenue since they can enjoy the shopping experience that they will not get from shopping elsewhere.
Awesome example of GameStop. i have a feeling that you, my friend, are a gamer. I love their commercials by the way with a guy dressed up in different game characters. You used Walmart and I honestly think almost everybody did :).
Hey I like Game stop too!! You are totally right on the money with them using focus strategy, thats all they sell. They should sell t shirts and stuff, they'd make more money that way. What do you think?
I love Sak's Fifth Avenue to shop.
As kyle Iai say,Sak's Fifth not just a department store. Most people enjoy shopping and carrying Sak's shopping bags as well. Sak's Fifth provide us upscale customer services as well as a great selection of items. They offer a wonderful shopping time and experiences that are something we are expecting from Sak's fifth!! Love it!!
first, i really agree with you that Walmart is a cost leader. It's "everyday low price" stategy really work good in the u.s.
Second, it is very interesting to know about Sak's Fifth Aven. Its differentiation really bring they good profits. they know business strategies well.
i don't really know about Gamestop. but their focus is really a good strategy. More important, their employees also know games well. this is a great selling point. i like it.
Jonathan,
Gamestop does hit it when it comes to focus, b/c like you said they only sell games and if you need some extra info about a game or about accessories the representatives there will also explain to you what is better to get. Not a heavy gamer but when in the mood definitely want to get a LAN tournament going!
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