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Hybrid price strategy

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › Hybrid price strategy

  • This topic has 2 replies, 2 voices, and was last updated 9 years ago by Ken Garrett.
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  • March 6, 2016 at 12:23 pm #303814
    abbas7796
    Member
    • Topics: 135
    • Replies: 256
    • ☆☆☆

    hello gromit

    can you please suggest some ways how a company achieves this hybrid strategy on strategic clock?

    what are some general ways?

    i understand if a company wants to be cost leader then the emphasis must be to reduce costs and open up margin. on the other side if it is in cost differentiation then it has to offer a product for which the customer is willing to pay higher (in other words the selling price gets increased)

    but how does it achieves both at the same time (hybrid)? i remember in your lecture where you said you can either be cost leader or differentiator but you cant be both.

    please advise

    thanks

    March 6, 2016 at 1:04 pm #303825
    abbas7796
    Member
    • Topics: 135
    • Replies: 256
    • ☆☆☆

    hi gromit

    another question:

    i am just confused between market penetration and penetration pricing.
    market penetration is when you increase ur market share by either dropping prices or by offering higher quality products. penetration pricing is when you just drop ur prices to penetrate

    so can market penetration be done by differentiation as well right? or is that only possible by cost leadership?

    March 7, 2016 at 11:43 am #304008
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    Hybrid: conventional generic strategies suggested cost leader or differentiator. The strategic clock sees some other possibilities, one of which is hybrid. There a producer manages to produce at low cost and produces better than aver age products. A difficult trick, but sometimes it is achieved, often through technological breakthrough.

    A current example might be Uber which offers low cost (and low price) but convenient taxis that you can see on your smartphone and pay for using a credit card.

    At one time Dell (computers) would have been in this category: low cost, good value computers of excellent quality.

    Market penetration means getting a large market share. Usually it is done by pricing, but it might be done through differentiation if the product was regarded as being very superior. Apple’s iPhones were in that category (though being pursued by Samsung).

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