Cost Leadership and Differentiation
Cost leadership entails organizing the firm’s resources in a way that the production of goods and services is achieved at the lowest price possible. It involves being the leader in terms of cost in the firm’s market or industry. By reducing the cost of production, the company is able to charge average industry prices. As a result, the business gains a unique selling proposition as it will charge customers the lowest price in the market for those products. An example of a company that uses this strategy is McDonald’s. The company deployed this strategy by producing in-house ingredients, minimizing delivery time, and using effective training methods (Bayraktar et al., 2017). This enabled them to lower the cost of raw materials and human resources through high-asset utilization.
On the other hand, differentiation is where a firm specializes in differentiating its products and services. It means that the firm needs to offer unique products and services that are easily differentiated from those of its competitors. It could be attained through brand image, design, technology, customer service, or even product features. One example of a company that uses this strategy is Apple. The organization has utilized product innovation and design to differentiate its products (Bayraktar et al., 2017). Apple’s unique operating system makes it stand out from its competitors as all its products have a sleek and more elevated design than their counterparts.
McDonald’s Corporate-Level Strategy
McDonald’s mission statement includes making delicious feel-good moments accessible to everyone through serving cheap and delicious foods. Besides this, the firm aims to share lighthearted moments that are welcoming, unpretentious, and make the customer feel good (McDonald’s, 2019). The company uses several corporate-level strategies to ensure its continued growth. It focuses specifically on its existing industry, the fast-food industry. By doing so, McDonald’s has been able to establish a strong global brand image and loyalty.
Another strategy used by McDonald’s is international expansion through franchising. McDonald’s is one of the world’s leading fast-food retailers, with more than 30,000 locations in approximately 100 countries (McDonald’s, 2019). Almost all of the firm’s restaurants are owned and operated by independent business owners. This strategy enables McDonald’s to compete in more than one market to serve the needs of other markets.
A third corporate-level strategy used by the company is the diversification of products to meet the different cultural needs of people in the global fast-food market. For example, the introduction of chicken burgers instead of offering beef burgers in China and India is due to the population’s cultural preference. This strategy enables McDonald’s to create and innovate new product designs that suit different markets, thus making it successful.
Uber’s Corporate-Level Strategy
Aside from McDonald’s, Uber also has a strong mission and goals. Its mission is to provide movement needs for customers worldwide for any place they want to go and anything they want to get in real-time (Uber, 2022). Just like McDonald’s, Uber also has several corporate-level strategies, including related diversification. Uber uses this strategy as it operates in several markets and provides different services, such as UberEATS. Although Uber’s main component is the ride-share program, the company has several other different services where customers can order food and get it right on their doorstep via Uber.
Another strategy utilized by the company is forward vertical integration. This can be seen in Ubers delivery of their own customer service. In this case, the individuals responsible for providing the service are also the ones delivering the service. For example, when an Uber driver picks up a rider, they are providing the ride’s service and delivering it by driving the person to their destination in direct contact (Uber, 2022). This strategy is used to increase Uber’s market power and provide customers with the best experience.
References
Bayraktar, C. A., Hancerliogullari, G., Cetinguc, B., & Calisir, F. (2017). Competitive strategies, innovation, and firm performance: an empirical study in a developing economy environment. Technology Analysis & Strategic Management, 29(1), 38-52. Web.
McDonald’s. (2019). Our mission and Values. Web.
Uber. (2022). About us | Uber. Web.