The High Stakes of Low-Cost Competition

The High Stakes of Low-Cost Competition Description

Low-cost competitors are on the offensive in many industries, from airlines to B2B capital equipment markets, eating away at the market share traditionally enjoyed by premium companies. Dealing with low-cost competition first requires understanding how radically the business model has changed: fewer companies are doing it all, but rather specializing in either product development or delivery or customer relationships. While there may be good reasons for adopting a more focused business strategy, companies need to realize how the interplay between premium and low-cost rivals is, in fact, fuelling the threat, which needs to be craftily managed. Using a multitude of real business examples, the author insists that companies today must learn how to take on low-cost competitors in the good-enough segment, develop hard-to-copy performance leadership products, and build deep and lasting relationships with their customers. A dual-pronged strategy - one that both challenges low-cost competitors in the good-enough segment, while also competing as a premium player using either performance leadership or relational value options - can serve to beat low-cost competitors at their own game.

Case Description The High Stakes of Low-Cost Competition

Strategic Managment Tools Used in Case Study Analysis of The High Stakes of Low-Cost Competition

STEP 1. Problem Identification in The High Stakes of Low-Cost Competition case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of The High Stakes of Low-Cost Competition case study

STEP 3. Industry Specific / Porter Five Forces Analysis of The High Stakes of Low-Cost Competition case study

STEP 4. Evaluating Alternatives / SWOT Analysis of The High Stakes of Low-Cost Competition case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis The High Stakes of Low-Cost Competition case study

STEP 6. Recommendations The High Stakes of Low-Cost Competition case study

STEP 7. Basis of Recommendations for The High Stakes of Low-Cost Competition case study

Case Analysis of The High Stakes of Low-Cost Competition

The High Stakes of Low-Cost Competition is a Harvard Business (HBR) Case Study on Technology & Operations , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. The High Stakes of Low-Cost Competition is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. The High Stakes of Low-Cost Competition case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. The High Stakes of Low-Cost Competition will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

The High Stakes of Low-Cost Competition case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Technology & Operations, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of The High Stakes of Low-Cost Competition, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The The High Stakes of Low-Cost Competition case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Technology & Operations Solutions

In the Texas Business School, The High Stakes of Low-Cost Competition case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – The High Stakes of Low-Cost Competition

Step 1 – Problem Identification of The High Stakes of Low-Cost Competition - Harvard Business School Case Study

The first step to solve HBR The High Stakes of Low-Cost Competition case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Low Cost is facing right now. Even though the problem statement is essentially – “Technology & Operations” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Low Cost, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the The High Stakes of Low-Cost Competition.

The external environment analysis of The High Stakes of Low-Cost Competition will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in The High Stakes of Low-Cost Competition case study. PESTEL analysis of " The High Stakes of Low-Cost Competition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with The High Stakes of Low-Cost Competition macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for The High Stakes of Low-Cost Competition

To do comprehensive PESTEL analysis of case study – The High Stakes of Low-Cost Competition , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact The High Stakes of Low-Cost Competition

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on The High Stakes of Low-Cost Competition

Government policies have significant impact on the business environment of any country. The firm in “ The High Stakes of Low-Cost Competition ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Low Cost is operating, firms are required to store customer data within the premises of the country. Low Cost needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. The High Stakes of Low-Cost Competition has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Low Cost in case study The High Stakes of Low-Cost Competition" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Low Cost in case study “ The High Stakes of Low-Cost Competition ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Low Cost in case study “ The High Stakes of Low-Cost Competition ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on The High Stakes of Low-Cost Competition

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ The High Stakes of Low-Cost Competition ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Low Cost can compete against other competitors.

Government Scheme & Subsidies Impact on The High Stakes of Low-Cost Competition

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at The High Stakes of Low-Cost Competition case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on The High Stakes of Low-Cost Competition

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Low Cost needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact The High Stakes of Low-Cost Competition

Social Factors that Impact The High Stakes of Low-Cost Competition

Technological Factors that Impact The High Stakes of Low-Cost Competition

Environmental Factors that Impact The High Stakes of Low-Cost Competition

Legal Factors that Impact The High Stakes of Low-Cost Competition

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in The High Stakes of Low-Cost Competition case study. PESTEL analysis of " The High Stakes of Low-Cost Competition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: The High Stakes of Low-Cost Competition case study solution