Retailers and Their Wonderful Strategies

One store that immediately comes to mind when thinking about cost leadership is Walmart! The only way they can keep their prices so low is to keep their costs to a minimum. A good example of them doing so is the lack of a Walmart in NYC. I would think that the reason for that would be higher taxes, costs associated with zoning problems and higher property costs.

I believe Nike is a company that uses a differentiation strategy. If you are asked what the best sports brand is, it is very likely that you will answer Nike, even though the quality of Reebok or Adidas may not be worse. However there is only one official Nike retail store and that is Nike Town where the prices on sporting goods and apparel are much higher than other retail stores. People still shop there because they consider Nike to be a higher quality product than all other competition.

Paragon Sports, a sporting goods store that I used to work in uses a focus strategy. They only have one retail store nationwide that is located in Manhattan so they apply to a very small geographic area. That is what I saw in the story. Only New Yorkers shopped there, Manhattan residents for the most part including actors and famous athletes that live in NY. I personally saw Walt Frazier, Spike Lee and James Gandolfini there. I think if there were a 100 other chains of this store nationwide, it would not attract shoppers of that caliber. I only say they're high caliber shoppers because they bought a lot of merchandise and we earned extra commission on sales =]

That Porter Model

The Porter Model is a very good tool to analyze the attractiveness of a certain industry. By attractiveness, I don't just mean entering an industry, but staying and competing inside it. It describes what kind of pressures a company will face from buyers, suppliers and its competitors. I think this is a relatively effective tools for determining whether an industry is worth penetrating since it helps you realize how profitable your company can be within that industry. However I also think that it leaves out the pressure a company can feel from a government or political groups. Are there any specific regulations for that industry? Any extra costs that will have to be incurred? What is this government's stance on monopolies or price setting? Etc. Aside government, I think the Porter Model does a good job describing the forces effecting an industry.

I think the automotive industry has high barriers for entry. The capital requirements for starting up a car manufacturing company have to be very high since you need the plant or plants and the expensive equipment used in auto manufacturing. Brand loyalty is in my opinion very strong. There are many people who only buy specific brands of cars. If a new brand of car comes out, people will be very skeptical about since there are already brands in existence that they know and trust. Also people switch cars once in a several years and the cost of switching is high since you're likely to be selling an old depreciated vehicle and buying a new and more expensive car. So customers will likely not want to switch to a new expensive product that they haven't heard of before.

Statement of Mission!

Here at Lenny Kaplan we strive to create a financial consultant of extremely high caliber and earn a most excellent salary. To achieve these goals, we utilize a variety of psychological techniques some of which include self-motivation, the desire to strive forward and good moral standards! We also implement not quitting and the lack of ability to stop, in order to reach our objectives. At Lenny Kaplan we don't just promise quality, we promise quantity ($)!