Low Cost or Differentiation

1. Using scenario planning, analyze the pros and cons of each alternative. election of low monetary value Pros * radical traffic for budget conscious customers * More sales volume Cons * More needed space to bear with product * Less product available because selling product faster * More labor undeniable for replenishment of inventory and store front * More disgruntled employees from sheer volume of customers * High employee dollar volume from stress Alternative of differentiation Pros * Highlights company strengths and niches * Attract target customers * Higher revenue per transaction pull down cost because specialized inventory needs less space Cons * Alienate customers that cant afford higher cost of product * Higher market risk because business is less modify Alternative of using both low cost and differentiation Pros * More customer volume * More diversified customer base * More opportunities through greater sales options Cons * Need more space * trade union movement wi ll feel more drained due to employees needing to have more product kat onceledge on a higher volume of product * Low cost diminishes the prestige and experience of the high cost * Low cost stigma diminished by expensive product . Think about the mixed clothing retailers in your local malls and city, and analyze the choices they have made about how to compete with one another(prenominal) along the low-cost and differentiation dimensions. Low cost Macys has gone to lower price points and over time lost prestige in the market. Macys has attempted to go for more volume merely because of the recession was always empty whenever I walked into the store. They stopped lower cost because they didnt want to flake out appearance of the go to fashion locale, instead they were being viewed as the cheaper last season stop.Macys is now trying to stop the decline in their reputation but are still stuck in the middle, give care the example in the book. Differentiation In the last five years Nords trom seems to be the go to up to date fashion stop for people seeking high end fashion. The prices are noticeably higher. Nordstrom understandably differentiates themselves through superior customer service, cleaner stores, and top designer name brands. Nordstrom differentiates themselves further with a next unlimited open return policy, free alterations and tailoring, helpful employees happy to be there, and employees happy to help demonstrate why they are worth the extra money.