Cost effective differentiation: an application of strategic concepts to retailing

Abstract

To date, much of the academic consideration of the concepts of strategy and its operationalization has focused on manufacturing industries. This paper reviews key aspects of the development of current thinking in relation to business strategy with particular reference to the application of strategic concepts within a retailing context. The importance of strategy within today's retail environment is considered and an analytical overview of the academic treatment of retail strategy is presented.

From this analysis the authors have put forward their own exploratory framework of appropriate strategic options for retailers through the development of a model combining Porter's generic strategies of cost leadership and differentiation. The final section considers in detail how this model, termed 'cost effective differentiation' by the authors, can be constructed and the framework applied to a variety chain store; in this case Marks and Spencer.

Keywords:

• Strategy
• retail
• differentiation
• cost leadership