Lesson 3: Strategy Formulation


MR609 Capstone: Strategic Management and HRM


Lesson 3: Strategy Formulation



Activity 3: Differentiation vs. Cost Leadership


Your task is to identify two (2) companies pursuing two (2) fundamentally different strategies: one, differentiation and the other, cost leadership.  The companies need not be in the same industry, but both must be publicly traded and based in the U.S.  You must cite all resources used and include an APA-formatted bibliography.  (100 points)  (A 4-page response is required.)


Part A        Answer the following questions.


  1. Explain why each firm has opted for its chosen strategy.  Specifically, you should highlight the exogenous and endogenous factors that might have contributed to their choice.  For example, is cost leadership the only feasible strategy in the industry in which your firm operates?  If so, explain and discuss why differentiation is non-implementable?  If not, discuss why the company chose this strategy over the other.  If they chose the differentiation strategy, discuss the same aspects above to include what valuable, rare, inimitable resources the company holds that allows it to successfully implement differentiation.


  1. If the fundamental strategies of the companies you have chosen have changed in the recent past, you should explain the drivers of the change.  For example, has there been a change in leadership or in consumer taste?


Part B        Discuss the impact on performance of each company’s chosen strategy.  Have these companies been successful relative to their competitors?  Why or why not?  If so, how?  Please be sure to clearly identify a direct link between the company’s strategy and its economic outcome.


Grading Rubric


Please refer to the rubric on the following page for the grading criteria for this assignment.


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