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Diversification & Cost Leadership

Today, the vice president of your company revealed that you will need to assist the company with its quest to implement a social networking Web site. He explains to you that you should research the different types of strategic analysis and explain how the strategic analysis will help the company get the Web running.

A report on strategic options and an explain of how they can better help a company in its implementation of a social networking Web site is necessary.

The following questions will need to be addressed for Diversification strategy and Cost Leadership Strategy.

Research Diversification strategy and Cost Leadership Strategy strategic options.
- Discuss how the strategic options can be employed to create and sustain a competitive advantage.
- Discuss the strategic options' pricing, features, and the clientele base for the social networking application.
- Discuss the pros and cons of each strategic option.
- Make a recommendation on which strategic option to use.

Solution Preview

The following questions will need to be addressed for Diversification strategy and Cost Leadership Strategy.

Diversification Strategy:
This strategy means that the firm seeks to increase its profitability through higher sales volume from new products and new markets. In the context of the social network site strategy, this means that the company should develop new social network products or should enter new markets. Some examples are setting up a network for doctors, setting up a network for pet lovers, or setting up a network for astrologists. Entering new markets for the company would mean that the company should provides services that are outside the scope of a social network site. For instance, the company can provide free e-mail services or can develop a free search engine.

- Discuss how the strategic options can be employed to create and sustain a competitive advantage.
In the context of social network site the development of new products can mean two things developing social network sites for specific groups of users, where a person presenting a valid identification of a profession can become a member of the network. Several professions like physicians, accountants, teachers, and even astronauts may want to have their own network. The other form of diversification is that the social network site that are ...

Solution Summary

This solution gives you a detailed discussion on diversification strategy. 817 words with references.

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