Question

Discuss the characteristics of the different functional structures used to implement the cost leadership, differentiation, integrated cost leadership/differentiation, and focused business-level strategies.

Answer 1

Explanation:

1-Cost leadership: in this functional structure, the organization's focus is to achieve competitive advantage in business through the strategy of pricing products and services cheaper than those of competitors. For this, it is necessary that the organization is fully integrated in order to join efforts so that there are joint actions in favor of reducing costs.

2- Differentiation: In this strategy, the focus is to offer products and services that are differentiated from those offered by the competition, that is, the organization seeks to offer products and services that have different benefits and characteristics to add value to the consumer, regardless of price.

3- Leadership / integrated cost differentiation: The company needs integration of its production systems, management and network system, so that it is possible to achieve economies of scale that reduce the cost of production and sales, and search for continuous improvement in all its processes .

4- Focused business level strategies: In this strategy, the organization will look for a specific market niche to operate and then look for cost reduction through a price system below those practiced in the market.