See instructions below in description Case Study

See instructions below in description - Case Study Example This translates to 75 cents as the per unit variable goods leading to profits of per pack profit of $ 5.50. Despite the high fixed costs the alternative is anticipated to sell the product to increase both market share and improved sales. In addition to this, the firm considers to use coupons and free gifts to promote the cigarette in order to achieve the price cut decision. However, decision is not the best since it is prone to unlikelihood of meeting the targeted price in the market. Variable costs in production may be a challenge in attaining price cuts. It may even make the firm operate at a loss (Nagle, Hogan & Zale, 2014). Philip Morris may consider rebranding its Marlboro cigarettes and market it as a new brand. This may involve changing the brand name, design, flavor and other attributes of the cigarettes to bring a differentiated appeal to the customers and competitors. Changes in the logo, name and flavors of the cigarettes are the key attributes that the firm ought to consider. In addition, its packaging may integrate a colorful wrappings and packets that bring a more attracting appeal to the users. Different flavors may be used to lure different customers to different flavors of choice. On another hand, the firm may consider rebranding its corporate name to shed its name against its rival firms. Price cuts are effective in attracting more users of a commodity. It is a marketing strategy that offers a better chance to a firm that is operating under a large scale. Reducing its prices as compared to its competitors enables the firm selling more and reaching a bigger number of its compelling customers (Clow & Baack, 2012). In such a case, the firm benefits from economies of scale and long-run profits. This technique may be disadvantageous to competing firms as they may be locked out of the market. In addition, it may induce monopoly in an industry that may be not beneficial to

Business Strategy & Strategic Management Assignment

Business Strategy & Strategic Management - Assignment Example The Blue Ocean’s strategic concept is seen to attempt to essentially represent all the various potential markets that are seen to as yet not exist and must therefore be created. The blue Ocean Strategy was first proposed by INSEAD’s professors Kim and Mauborgne in the year 2005 (Uden, et al. 2013).As proposed by Kim and Mauborgne, the Blue Ocean Strategy fundamentally suggests that companies should attempt to create new demand across various uncontested market spaces with the sole objective of attempting to avoid competition. In line with the Blue Ocean Strategy, companies are required to ensure that they break down the traditional wall used in product definition, carefully rethink and re-strategize on exactly how their service or product will eventually be positioned in the market and eventually develop a series of new products as a result of their endeavors to ensure that they always attempt to think outside the box (Wong, 2010). According to Todd and Bessant (2011), as a result of the blue ocean strategic concept, it is normal for new markets to be created due to the challenging of the various boundaries that are seen to exist between different markets and industries, however, there at times happens to be whole new industries created as exemplified by those that in recent years have been seen to have been spawned by the internet. As such, it is evidently clear that both new entrants and incumbents play a crucial role in the formation of these new markets (Tidd and Bessant, 2011). Professor’s Kim and Mauborgne distinguish the Blue Ocean Strategies by attempting to try and compare them to the more traditional form of thinking which are seen to constitute of the Red Ocean Strategies (Ziesak, 2009). As opposed to the Red Ocean strategy of developing new products that compete in the currently existing market space, companies should ensure that they develop new products that have been positioned in uncontested market spaces which is in line wi th the Blue Ocean strategy. The Blue Ocean strategy also aims to try and make the competition irrelevant as opposed to attempting to beat this same competition as is commonly seen in a Red Ocean strategy (Siegemund, 2008). While the Red Ocean strategy attempt to try and fight for a share of the existing customers and market segment, the Blue Ocean strategy as proposed by Professors Kim and Mauborgn