Using The Fortune 500 List identify one company that uses Lo

Using The Fortune 500 List, identify one company that uses Lowest-Cost Strategy and one company that uses Differentiation Strategy. Explain how these strategies work and why these particular companies use them. Do not use any of the companies given as examples in the textbook or used by another student. Do not use Ross, Starbucks, Walmart, Dick’s Sporting Goods, Dollar Tree, Nike, Kroger, Disney, Amazon, Costco, Apple, Spirit Airlines, and Whole Foods.

Solution

#IKEA

IKEA has emphasized its strategy on the core of sustainable profit via a low-cost business model. The model has allowed the company to monitor the true cost involved in manufacturing a specific product, including all parameters such as design, sourcing, and operational expenses involved. While growing its business operations, the company has also capitalized on maintaining low costs.

IKEA feels and believes that the company can be a leader in low-cost business model without compromising the quality. To generate low cost, IKEA uses a flat packing process and that helped the company to ship and store more elements between distribution centers.

The company managed to convince its customers that their role is not to consume value, but to develop it. IKEA has modified the value chain approaches by integrating the customer into the process and introducing a two-way value system between customers, suppliers, and IKEA’ plants. With the help of this, the company is able to create a supply chain that is differentiating and growth enabling, which allows IKEA to operate efficiently.

The heart concept of IKEA became a very niche in the industry. In terms of consumer satisfaction ratio IKEA established a concrete solid core competency. The realistic and simplistic approach allowed IKEA to maintain a low-cost structure simultaneously focusing on value for customers around the world.

#Differentiation Strategy: Virgin Airlines

Virgin’s differentiation business strategy is two-fold i.e. pricing and service. By substantially reducing the costs associated with air travel, Virgin Airlines has maintained its competency the cost-cutting airline companies.

Lower costs, doesn’t means that the company has sacrificed the service ratio. However, the service is fully equipped with on-plane Wi-Fi, touchscreen seatback entertainment mediums, and full meals with lavish cubicles.

A crustal clear strategy has enabled the company to maintain and propel their presence in the global air travel market.