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Page 3 of 7 Differentiation Strategy with a Product Life Cycle Focus
Strategy
A differentiation strategy with a product life cycle focus gains competitive advantage by distinguishing products through high awareness and easy accessibility, while minimizing R&D costs by allowing products to change in appeal from High Tech to Low Tech buyers over time. Prices are above average. Capacity is expanded as higher demand is generated.
Mission Statement
Premium products for mainstream customers: quality you can count on. Our primary stakeholders are stockholders, customers, employees, and management.
Tactics
• Research & Development: We will have multiple product lines in both segments. Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability.
• Marketing: We will spend aggressively in promotion and sales. We want every customer to know about us, and we want to make our products easy for customers to find. We will price at a premium.
• Production: We will grow capacity to meet the demand that we generate, avoiding second shift/overtime when possible. After our products are well positioned, we will investigate modest increases in automation levels to improve margins.
• Finance:
We will finance our investments primarily through stock issues and cash from operations, supplementing with bond offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are somewhat adverse to debt, and prefer to avoid interest payments. We expect to keep assets/equity (leverage) between 1.5 and 2.0. We measure performance in terms of stock price, ROS, Asset Turnover, and ROA.
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