Week 6 Blog Post Chapter 7

PRODUCT DIFFERENTIATION  VS COST LEADERSHIP STRATEGIES

Amazon seems to be stuck in the middle. Sometimes it is best to
be “stuck in the middle” That is the name that Porter uses when
a firm attempts to implement both strategies.

Product differentiation is a strategy

that showcases the differences between products. Differentiation makes a

product more attractive by contrasting its unique features from other its

competitor's products. Product differentiation increases competitive advantage

for the seller because the customers view the product as superior or unique.

Were as cost leadership can establish a competitive advantage by having the

lowest cost of operation in the industry. Cost leadership is often driven by company efficiency, size, scale, scope and learning curve. A cost leadership strategy aims to exploit the

scale of production, well-defined scope, and other economies and, to produce

highly standardized products, using

advanced technology.

Having an Amazon prime membership account has its perks. Customers have a unique
opportunity to have access to the latest movie and music plus 2-day shipping
which keeps customers paying the yearly subscription fee. Amazon also uses a
cost leadership strategy too because they have the lowest prices for most of
their product that they sell, which give them a competitive advantage in the e-commerce market.