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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:
More likely to reposition products than introduce new ones to the market
Capacity improvements are unlikely to be undertaken (may run overtime instead)
Automation may be pursued to increase margins
Investments will be financed with debt and/or stock issues
Tends to spend less on promotion and sales
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 ЎX and still be profitable.
Firm Profile:
Multiple product lines in the Low Tech segment
Invests heavily in automation
Spends moderately on advertising to cost sensitive customers (sales people have more than one product to pitch to prospects)
Investments financed with debt and/or stock issues
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:
Low R&D spending (very little repositioning & new product every 2-3 years)
Invests in automation early in the productЎ¦s life-cycle
Moderate spending on promotion and sales
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:
High R&D spending to keep products fresh
Maintains a presence in both market segments
Spends heavily on advertising and sales to create maximum awareness and accessibility
Prices tend to be higher
Focus on Market Share, Profits, and