Investigating the relationship between differentiation strategies and cost leadership on sales in industrial companies in Tehran

Number of pages: 143 File Format: word File Code: 30814
Year: 2014 University Degree: Master's degree Category: Management
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  • Summary of Investigating the relationship between differentiation strategies and cost leadership on sales in industrial companies in Tehran

    Master's thesis in the field: Executive Management

    Strategy: Strategic

    Abstract:

    The purpose of this research is to design and explain a model to evaluate the impact of the components of the performance-based approach of industrial companies based on the strategy of cost leadership and price reduction in 5 industries of juice and beverages, meat products, snacks and dairy products in Tehran. In this study, using a strategic approach, the researcher examines the relationships between the components of the price reduction approach, cost leadership and performance, which are the main structures of the research.

    This research pursues the goal of how the application of various strategies (cost reduction strategy and price leadership) and the difference between them, directly and indirectly (through competitive strategies) leads to high levels of performance. The conceptual model of the current research actually includes 4 levels in competitive strategic management, i.e. cost leadership, differentiation, concentration with a price approach or concentration, and a level without strategy. Among the 40 strategy questions, there are 10 questions at the level of differentiation strategy, 10 questions at the level of cost leadership strategy, 10 questions at the level of concentration with a price or differentiation approach, and 10 questions related to the level without strategy. In order to check the normality of the population, the one-sample Klugrof-Smnirov test was used, which confirmed the normality of the population. Also, in order to check the significant relationship between the strategies of the organization's competitive level and the performance of each industry, the Pearson correlation test was used, which indicated the existence of a significant relationship between the mentioned variables. Based on the results, various organizations in a specific industry differ greatly in terms of cost leadership and price reduction competitive strategies, and if a specific strategy is used, they have different levels of performance. Keywords: competitive strategy, organizational performance, competitive resources, cost leadership competitive strategy, price reduction competitive strategy, differentiation competitive strategy. 1-1- Introduction In the current dynamic and competitive environment, the importance of applying The right strategy against competitors is not hidden from any knowledge manager. Following the right strategy of competition in such a market leads to stabilization of the position of the organization in the respective industry. The organization's position relative to other players in an industry determines its profit, and an organization that can place itself in a suitable position compared to its competitors will earn a higher profit than the average of that industry. Moreover, such an organization will taste the sweet taste of quick return on investment, even with the unfavorable structure of the industry in which it operates. The basic basis of maintaining such a position among competitors is maintaining the company's competitive advantage in the relevant industry. Depending on the structure of each industry, the competitive advantages of companies in facing each other take on very wide dimensions. Also, depending on whether the scope of the organization's activity covers the entire market or operates for a sector or sectors of the market, different strategies can be seen among companies. Among the numerous dimensions of competitive advantages, two basic dimensions can be identified as the intersection of these approaches.

    The result of combining these two basic dimensions with the scope of each organization's activity in the relevant industry puts three general strategies in front of managers, which are:

    - Supplying the cheapest product to the market or cost-leadership

    - Supplying a different product to the market or differentiation strategy

    - Focusing on a part of the market with a price or differentiation approach (focus)

    The goal of the two strategies of price leadership and differentiation is to take over the entire market and the goal of the focus strategy is a part or small parts of the market. 1-2-Statement of the problem: As industries dependent on agricultural products, food and processing industries are among the most important industrial groups that can contribute to the economic development of countries, especially developing countries. play an efficient role. One of the reasons for this is the cheapness of the raw materials of agricultural products, the existence of cheap labor, the low investment and exchange rate required for these products. The creation of these industries can increase the added value of agricultural products in the food industry, while purchasing agricultural products and eliminating seasonal fluctuations and reducing surplus production, it is possible to prevent the waste of these products and turn the seasonal supply into a permanent supply.

    Today, the country's food industry makes a significant contribution to the economic progress of most developed and developing countries.

    Today, the country's food industry has a significant contribution to the economic progress of most developed and developing countries. The mentioned evidences show the significant participation of these companies in economic growth and increase in employment and innovation. Marketing actions are also considered as an organizational function and a set of processes to create, communicate and create value for customers and manage relationships with them in order to create value and profitability for the organization and its stakeholders.

    A comprehensive look at both approaches shows that the success of a business is to create long-term relationships with customers and create special value for them, and the result of this operation is to acquire loyal and enamored customers who are a valuable and prestigious resource for spreading the product among other consumers. and in fact, it is this knowledge and marketing capability that enables the company to discover, create, arouse, satisfy and fulfill the demands and wishes of customers. With regard to the aforementioned, the main focus of the present study is on the effect of using strategies to create image and cost leadership in food industry companies as an effective tool to create values.

    1-3- The importance and necessity of conducting research:

    Food industries, the notable thing in their marketing activities is the presence of undocumented and unplanned actions, which makes them vulnerable in the current turbulent environment. The main reason for this shortcoming can be found in problems such as financial limitations in the scope of the marketing network, the existence of tasteless and unorganized actions and excessive reliance on the inherent competencies of the manager/owner in marketing and sales. However, having professional marketing skills is considered vital in the survival and development of small and medium-sized businesses. Basabeh has been considered as an inevitable, fixed and applicable principle in food industry companies. This phenomenon has caused serious attention to be paid to marketing-related issues in such companies. Therefore, according to the little history of studies in this field, it seems that the identification and development of the concept of marketing and its processes in small and medium-sized businesses is necessary and an attractive topic. Research

    General: Are different marketing strategies effective on sales?

    Special:

    What is the relationship between differentiation strategies and sales in Tehran food industry companies?

    What is the relationship between cost leadership strategies and sales in Tehran food industry companies?

    1-6- Research hypotheses

    1-7- The main hypothesis

    There is a meaningful relationship between differentiation strategies and the amount of sales.

    1-8- Sub-hypothesis

    There is a significant relationship between the variety in color, design and role of goods and the amount of sales in industrial companies of Tehran.

    There is a significant relationship between the quality of raw materials and the amount of sales in industrial companies of Tehran.

    Between the diversity of distribution methods and the amount of sales of goods in There is a significant relationship between the effective marketing methods and sales volume in Tehran industrial companies. 1-9-Main hypothesis There is a significant relationship between cost leadership strategies and sales volume. Sub-hypothesis 1-10 There is a significant relationship between reducing production costs and increasing sales in Tehran industrial companies.

    There is a significant relationship between the standardization of production factors and sales increase in Tehran industrial companies.

    There is a significant relationship between the purchasing power of raw materials and sales increase in Tehran industrial companies.

    There is a significant relationship between information review investment and sales increase in Tehran industrial companies.

    1-11- Operational definition Concepts:

    1-11-1-Strategy

    It means determining long-term and basic goals and ideals for a company, and accepting a set of actions and allocating the necessary resources to achieve these goals and ideals. (Armstrong; 1381; 47).

  • Contents & References of Investigating the relationship between differentiation strategies and cost leadership on sales in industrial companies in Tehran

    List:

     

    Chapter 1, general research. 2

    1-1- Introduction. 3

    1-2- Statement of the basic problem of the research in general (including description of the problem and its introduction, statement of unknown and ambiguous aspects, statement of relevant variables and the purpose of the research) 4

    3-1- The importance and necessity of conducting the research (including the existing disagreements and research gaps, the need for the subject, its possible theoretical and practical benefits, as well as materials) a possibly new research method or process that will be used in this research. 5

    1-4- Literature review and relevant records (brief statement of the background of the research conducted inside and outside the country regarding the research topic and their results and literature review and the theoretical framework of the research). 77

    1-5- The aspect of newness and innovation in research. Error! Bookmark not defined.

    1-6- specific goals of the research (including ideal, general, special and practical goals). 6

    1-7- Research questions. 6

    1-8- research hypotheses. 7

    1-8-1- The main hypothesis. 7

    1-8-2- Secondary hypothesis. 7

    1-8-3- The main hypothesis. 7

    1-8-4- Sub-hypothesis. 7

    1-9- Definition of technical and specialized words and terms (conceptually and operationally). 8

    1-9-1- Strategy. 8

    1-9-2- Segmentation and determination of target markets. 8

    1-9-3- Marketing strategies. 9

    1-9-4- Marketing mix. 10

    1-10- Research methodology. 11

    1-11- Full description of the method (field, library) and tools (observation and test, questionnaire, interview, fiche, etc.) of data collection Error! Bookmark not defined.

    1-12- Statistical population, sampling method and sample size (if available and possible). 14

    1-13- Data analysis methods and tools 14

    Chapter 2. 15

    Theoretical foundations of research. 15

    2-1- Introduction. 16

    2-2- Strategy and structure. 17

    2-2-1- Organization with defensive strategy. 18

    2-2-2- Forward-looking organizations. 18

    2-2-3- analyst organizations. 18

    2-2-4- passive organizations. 18

    2-3- Comparison of four types of strategies of Snow and Miles in the impact on the structure of the organization. 19

    2-3-1- Comparison of two strategies of differentiation and minimum cost in the impact on the structure of the organization. 19

    2-3-2- Comparison of two strategies of differentiation and minimum cost in the impact on the structure of the organization. 19

    2-4- The difference in the structural height of organizations with the strategy of differentiation and minimum cost. 20

    2-5- Strategic management. 20

    2-5-1- Strategic attitude and its relationship with other attitudes to management. 21

    2-5-2- Process approach to management. 21

    2-5-3- Quantitative attitude to management. 21

    2-5-4- behavioral attitude to management. 22

    2-5-5- Systemic approach to management. 22

    2-5-6- Necessary attitude to management. 22

    2-5-7- Strategic attitude to management. 23

    2-6- Strategy levels. 27

    2-6-1- Company level strategy. 29

    2-6-2- Business level strategy (commercial). 29

    2-6-3- functional strategies (duty). 29

    2-7- The concept of strategic coordination. 30

    2-8- Strategic management. 31

    2-8-1- Necessities of using strategic management. 32

    2-8-2- The benefits of using strategic management. 33

    2-9- Strategic management process. 33

    2-9-1- Strategic management levels. 36

    2-10- Porter's competitive strategies. 37

    2-10-1- price leadership strategy 40

    2-10-1-1- strategic components of cost reduction. 46

    2-10-1-2- economy of scale. 48

    2-10-1-3- experience curve. 48

    2-10-1-4- Cost reduction culture. 48

    2-10-2- Associated risks in the minimum cost strategy. 49

    2-10-3- differentiation strategy. 49

    2-10-3-1- Ways that companies can differentiate their products or services. 51

    2-10-3-2- Differentiation factors. 53

    2-10-3-3- cost in differentiation strategy. 55

    2-10-3-4- Risks in differentiation strategy. 55

    2-10-3-5- successful differentiation strategies. 55

    2-10-3-6- Creating added value for the customer. 56

    2-10-3-7- Creation of perceptual value. 56

    2-10-3-8- Two attitudes related to differentiation. 57

    2-10-3-9- Selection of quality. 57

    2-11- Comprehensive quality management (TQM). 58

    2-11-1- Focusing on the customer. 59

    2-11-2- Investment return rate. 59

    2-12- brand equity.60

    2-12-1- Awareness and recognition of the brand name. 61

    2-12-2- Brand identity. 61

    2.12.2.1.                                            Brand loyalty. 62

    2-12-3- Concentration strategy. 62

    2-12-4- Company without strategy. 63

    2-13- The natural pattern of developing a marketing strategy. 65

    2-13-1- The model of Walker et al. 66

    2-13-2- Wilson and Gilligan model. 67

    2-14- Model of factors affecting marketing strategy. 69

    2-14-1- Crayons pattern. 69

    2-14-2- their simple pattern. 70

    2-15- Marketing strategy model: a positive framework. 70

    2-15-1- McDaniel and Kolari model. 70

    2-16- Product. 71

    2-17- Structural analysis of the industry. 74

    2-17-1- Company and industry interaction. 75

    2-17-2- Differentiated price leadership-cheap differentiation. 76

    2-17-3- Profitability over time. 76

    Chapter 3. 80

    Research method. 80

    3-1- Introduction. 81

    3-2- Method and type of research. 81

    3-3- Statistical population. 83

    3-4- Sampling method. 83

    3-5- Information gathering method. 84

    3-6- Combination of questionnaire questions. 84

    3-7- Validity of information gathering tool. 85

    3-7-1- Appearance validity. 85

    3-7-2- content validity 85

    3-7-3- prediction validity. 85

    3-7-4- Convergent validity and divergent validity 85

    3-8- Determining the reliability (reliability) of the questionnaire. 86

    3-8-1- Cronbach's alpha coefficients on each of the studied variables. 88

    3-9- Method of data analysis 88

    3-9-1- One sample t-test (Student) for the average of the population. 89

    Chapter 4. 90

    Data analysis 90

    4-1- Introduction. Error! Bookmark not defined.

    4-2- The second part: Inferential analysis of research hypotheses. Error! Bookmark not defined.

    Chapter 5. 113

    Conclusion. 113

    5-1- Introduction. 114

    5-2- Summary of descriptive results. 114

    5-2-1- Findings according to the field of activity. 114

    5-2-2- Findings according to activity history. 114

    5-2-3- Findings according to the field of activity. 114

    5-3- Discussion about the findings 115

    5-4- Practical suggestions. 122

    5-5- Research proposals. 123

    5-6- Research limitations. 124

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Investigating the relationship between differentiation strategies and cost leadership on sales in industrial companies in Tehran