A focused cost leadership strategy, in other words, attention to consumers, would be appropriate. Cost focus is a strategy that will focus on a particular buyer group or geographic market and attempt to serve only that location, to the exclusion of others. When considering cost factors, there are very few options available to K-Mart in developing a pricing strategy to compete with Target or Wal-Mart. Therefore, K-Mart would not have many pricing strategy options available. However, using a cost-focused strategy and matching the quality of well-known brands, but keeping costs low by eliminating advertising and promotional expenses will save K-Mart money. Should Kmart and Sears maintain their own identities and have unique competitive strategies, or should they be combined in some way with a new overall corporate competitive strategy? Please defend your answer. The key issues for K-Mart strategies are finding the right cost level for an opportunity to be aggressive and differentiating the product for the consumer in terms of different consumers and different intangible attributes of the product. K-Mart and Sears should be combined with a new global corporate competitive strategy focused on costs. This may prove to be the only sensible strategy and the one that best describes the strategy adopted. Cost leadership and product differentiation strategies are often described as mutually exclusive: you can pursue one or the other, but not both. You can minimize costs or aim for maximum product quality and customize it based on market requirements. Some products are by their nature standardized. However, it is impossible to differentiate the product in the consumer's mind. This tends to place all the emphasis on costs and therefore prices. It makes no sense for the consumer to pay extra for the same products. However, K-mart and Sears should use strategies such as changing store locations to a more attractive destination. Both would need the development of new branded products, which would have a lower cost and higher quality for customers. Question 2 Carefully read the short Kmart case study on pages 161-162 and answer the following questions: What business competitive strategies were used by each of Kmart's major competitors? Wal-Mart follows a low-cost competitive strategy and cost leadership. For Wal-Mart, strategic thinking is the process of continually redefining its objectives. Competitive advantage over current and potential competitors and risk management at levels considered acceptable by the company's key stakeholders.