Comparing T. J. Maxx, Marshalls, And Nordstrom Rack

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A competitive strategy is defined by choosing whether to compete based on a lower cost basis or by products or services. A second factor is whether to be the principal competitor in the market or be positioned in a smaller sector of the market that can still be lucrative. Porter projected three competitive approaches that can be used by all industries. These forces are cost leadership, differentiation, and focus. Cost leadership is generating a similar product at a lower cost compared to their competitor more proficiently. By producing the product at a lower cost, this allows the cost leader to sell it at a lower price. Examples of this approach would be T.J.Maxx, Marshalls, and Nordstrom Rack. These stores sell high-end products at a lower price. By implementing this strategy, the cost leader has several advantages. These benefits are protection against their contenders, earnings when competition is at a highpoint, high bargaining influence with suppliers due to increasing market shares, and obstruction to competitors entering the market because the…show more content…
As a result of generating these products or services, an enterprise can charge a premium price. Additionally, customers are more willing to pay a higher price for the unique product. Likewise, customer loyalty increases the entry barrier for competitors because they need to be able create their own unique product in order to differentiate themselves. Some examples of companies using the differentiation strategy are Jeffrey Campbell (shoe designer), Lamborghini (automobile), and Samsung (TV’s and cellphones). Research has shown that the differentiation strategy generates higher earnings compared to the low cost strategy because it creates a greater barrier for companies to enter the market. Whereas, as mentioned above the low cost strategy creates a higher market share compared to the differentiation

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