Question

4. Compare and contrast cost drivers and uniqueness drivers in a company's value chain. Explain how these drivers might support a firm's generic strategy.

Answer 1

Answer:

Cost drivers are the factors that can influence or effect the cost of the value chain of the company such as direct labor , machinery use etc.

Uniqueness drivers are the factors that can create differentiation effect for the products which results in high customer value such as differentiated packaging, better services etc.

Cost drivers can support firm's generic strategy by:

• determining the true cost of the product.
• Resources can be fully utilized
• Identifying in attaining economies of scale
• Help in identifying inefficiencies and undertaking advanced technologies to keep the prices low

Uniqueness drivers can support firm's generic strategy by::

• Increasing customer loyalty
• Innovation and advanced technologies can be incorporated.
• Special features will be added making the product different and unique from others.
• Customers services will enhance
• Skills of employees will increase.