Question

Your company has a cost differentiation strategy regarding its products. There are several new entrants into your saturated market that make the margins so slim on the product line you manage that profits are almost​ non-existent. What should you recommend to​ management?

Answer 1

Answer:

I recommend to change to an hybrid strategy

Explanation:

If you have almost nonexistent profits you have to change the strategy.  

Nowadays customers expect to get everything at once: differentiated, high-quality products combined with excellent service at a low price. Customer expectations require companies to adopt a multidimensional strategic approach. Hybrid strategy integrate cost and differentiation advantages, so this could be a way  to respond to these changes. Modern production technologies and organizational structures helps to achieve both high quality and productivity at the same time.

Some of the benefits of this strategy are,

• Can increase market share because of the differentiation

• Product innovation  
• Increase of profits ( you can offer your product at a higher price)