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Date:c Aprilc 2nd,c 2022
To:c Joanc Smithfieldc
From:c Alexanderc Alzatec
Subject:c Analysisc ofc newc productc expansionc
A.c Thec Porterc Competitivec Modelc isc applicablec toc Smithfield'sc currentc
situationc becausec ofc thec 4c pillarsc thatc thec porterc modelc follows,c thec conceptc
ofc loweringc pricesc andc massc producingc furniturec atc ac pricec pointc thatc isc inc ac
largerc economicc classc meaningc thec furniturec wouldc bec massc producedc andc atc
ac lowerc price.c Thec issuec withc massc productionc isc Smithfieldc wouldc bec
strugglingc toc setc themselvesc apartc fromc otherc companiesc thatc currentlyc doc
thec samec thing,c withc lessc diversityc causesc ac higherc changec ofc productsc toc sitc
andc eventuallyc becomec ac lossc forc thec company.c Ac lowc costc integratedc
strategyc isc ac veryc popularc formc ofc sellingc productsc ofc furniturec toc bec specificc
butc becausec ofc thec sizec ofc Smithfieldc comparedc toc largerc companiesc likec
Walmartc ofc Targetc theyc wouldc bec placingc themselvesc inc competitionc withc
massc producingc megac companiesc thec havec thec advantagec whenc itc comesc toc
productionc pricec pointsc andc manyc otherc aspectsc ofc creatingc andc storingc thisc
furniture.c Thec otherc optionc forc Smithfieldc wouldc bec ac focusedc
differentiationc strategyc inc whichc theyc wouldc becomec morec ofc ac customc orc
boutiquec stylec furniturec storec meaningc whatc theyc offerc wouldc bec limitedc
andc somethingc notc easyc toc find,c thisc routec canc leadc toc higherc profitc marginsc
andc thec abilityc toc setc themselvesc apartc fromc bigc boxc storec butc inc turnc willc
cutc theirc potentialc buyersc byc quitec ac bitc becausec ofc thec pricec pointsc ofc thesec
products.c Havingc ac competitivec advantagec inc anyc aspectc isc keyc andc thisc
routec wouldc givec themc ac keyc advantagec inc differentiationc ofc thec productsc
theyc offerc butc againc willc makec thisc movec ac bitc riskyc asc thesec newc andc uniquec
productsc mustc bec somethingc peoplec likec orc theyc willc havec increasedc productc
costsc andc havec decreasedc salesc byc ac lot.c
B.c Thec bestc choicec forc Smithfieldc wouldc bec differentiationc strategy,c withc thec
alreadyc beingc ac smallerc sizedc businessc givingc Smithfieldc thec abilityc toc havec ac
competitivec advantagec inc ac nichec marketc willc allowc themc toc separatec
themselvesc fromc thec bigc boxc storec thatc havec ac strongc footc printc inc valuec
furniture.c (Stagesc andc Strategies,c Lumen)c Designerc companiesc arec awarec
thatc theyc arec takingc ac riskc whenc chargingc topc dollarc forc anc itemc butc thec
beliefc thatc theirc productc isc worthc thec extrac costc becausec ofc itsc qualityc andc
uniquenessc allowc themc toc doc so,c Smithfieldc needsc toc separatec themselvesc
andc takec ac chancec atc becomingc ac brandc thatc notc allc peoplec havec andc ac brandc
thatc peoplec knowc thec extrac moneyc isc worthc spendingc becausec itc willc lastc
longerc andc isc higherc quality.c Smithfieldc wantsc toc becomec andc exclusivec
brandc andc thisc isc thec wayc ofc doingc so,c becomingc ac massc productionc companyc
willc inc thec shortc termc increasec spendingc costc onc manufacturingc andc
materialsc whilec addingc morec competitionc toc theirc market.c Reductionc inc
competitionc isc keyc forc Smithfieldc toc continuec growc andc setc themselvesc apartc
fromc otherc brands.c
C.c Ac marketc analysisc wouldc bec thec bestc firstc stepc forc Smithfield,c thisc
companyc shouldc doc specificc researchc onc thec exactc competitionc thatc isc inc thec
marketc currentlyc andc thec productsc theyc offer;c inc additionc toc thec analysisc toc
thec competitionc Ic wouldc recommendc thatc Smithfieldc doesc anc analysisc ofc thec
consumersc thatc arec inc thisc marketc asc wellc andc thec typec ofc furniturec theyc
seemc toc bec mostc interestedc inc soc thatc theyc canc findc anyc competitivec
advantagesc whenc itc comesc toc newc andc innovativec furniturec thatc mayc notc bec
outc yet.c Havingc anc in-depthc understandc ofc thec marketc andc whatc peoplec arec
offeringc comparedc toc whatc consumersc arec lookingc forc willc allowc Smithfieldc
toc startc offc theirc newc linec ofc furniturec onc thec rightc footc becausec they'llc bec
offeringc luxuryc optionsc thatc mayc bec inc demandc whilec alsoc notc offeredc byc
otherc companies.c
Bruton,c J.c (2022).c Porter'sc Competitivec Strategies.c Inc Lumenc Learningc (Ed.),c
Principlesc ofc Management
c (Modulec 4).c Lumenc Learning.c Retrievedc fromc
https://courses.lumenlearning.com/wmopen-
principlesofmanagement/chapter/stages-and-types-of-strategy/
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