Please enable JavaScript.
Coggle requires JavaScript to display documents.
Business Unit 8 - Coggle Diagram
Business Unit 8
-
Cost advantage
Definition: describes a company with low operating costs. This means they are able to cut prices without affecting profit margins
Example - Aldi: Aldi sells 90% of it's products from it's own brand line. As well as this, they look to supply their goods from local vendors, lowering delivery costs and focus on keeping as little inventory as possible so that cash is not tied up in stock. Also, they do not provide seasonal discounts so that they can keep prices cheap 24/7/365
KIR example: McDonald's signature burger (big mac) is $6 compared to their main competitor burger king's signature burger (whopper) coming in at $7
KIR example: Amazon is a massive company meaning that they experience significant economies of scale and can therefore sell their products at a cheaper price than any other retailer. 15% less on average according to a study by profitero
differential advantage
Definition: describes a situation where a company can out compete it's rivals because they produce better quality products that are more highly differentiated
Example - Mercedes: Mercedes uses high quality materials and the latest technology to make their cars standout from the rest the luxury design and feel allow mercedes to have a differential advantage as no car can replicate their cars. They also have a certain stigma surrounding them that appeals to the rich
-
KIR example: JLR use the best technology and designs to create easily distinguishable and luxurious cars that cannot be replicated
-
-