Question

Coca Cola has successfully implemented the integrated cost leadership/differentiation strategy (what are the pros and cons of both strategies)(bullet the answers for both pros and cons)

Answer 1

1)

Cost leadership Pros:

• It helps to maintain market dominance due to low price and large customer base
• The competitors are not able to enter the market place due to low price point

Cost leadership Cons:

• It reduces the profit margin for a company and thus have intense pressure of production cost
• It may be perceived as low quality item and create negative perception
• It requires large volume in order to survive and recover the cost

Product differentiation Pros:

• It is easy to develop and focus on marketing strategy due to differentiation
• It helps the company to stand out from competitors and attract more customers
• It builds positive brand image as organization is perceived as innovative

Product differentiation Cons:

• It may not fulfill need of large customer base due and thus have limited people attached
• It is very risky in nature as market may not accept the product and thus lead to wastage