All, In this discussion thread, you are tasked with the selection of your 2 companies for the first quiz question for this module. The quiz for Module 1 consists of 3 essay questions, worth 15 points each. For the first question: You are asked to identify 2 unique companies - one that you believe pursues a lowest-cost strategy and another that pursues a differentiation strategy. Relying on personal knowledge, company annual reports, or articles in newspapers and business periodicals, discuss these companies' competitive strategies.  In this discussion thread, you will share with the class the 2 companies you have selected for your analysis. Each student is expected to select 2 unique companies - in other words, each company can be used only once for the question. So my suggestion is to select early and post here - the first student who selects the company will be allowed the use of that company. At that point, different companies must be selected.  student 1 A company that pursues the lowest-cost strategy would be Walmart, which I am sure comes to everyone's mind when thinking about this topic. If you are looking to buy products at the lowest price possible, Walmart is where to go. They can offer their products at “Everyday Low Prices” just as their slogan suggests on a large scale. Walmart can keep their prices low by the enormous volume of sales and the large customer base. Walmart cost-effectively manages its supply chain. “Supply chain management based on electronic product information, vendor role in distribution, and layout of warehouses: Walmart has a supply chain system that is regarded in multiple quarters as one of the most technologically advanced and efficient” (Hyde, 2018). In my opinion, Walmart sometimes has a bad reputation for not being the nicest looking or lacking cashiers, but that does not seem to matter as the price seems to drive their sales and people are taking advantage of their prices and products. I believe the growth for e-commerce will only help their sales and keep them on the top as a company that offers the lowest prices around.        A company that comes to mind that pursues the differentiation strategy is Chipolte Mexican Grill. Their number one focus is the quality of the ingredients that go into their food. Chipolte will not have the cheapest fast food but it will have the best quality ingredients compared to its competitors. According to Herosmyth (2020), Chipolte uses local and sustainable ingredients and pride’s itself in working with family farmers that are located within a 130-mile radius of each restaurant location. They also offer non-GMO ingredients that help them stick out from the rest. As their food is not the cheapest, their differentiation strategy is working as they are one of the top Mexican fast-food restaurants in the US.       Compensation professionals that utilize the differentiation strategy need to focus on their client’s needs and beliefs to be successful as the cost of th ...

1. All,
In this discussion thread, you are tasked with the selection of
your 2 companies for the first quiz question for this module.
The quiz for Module 1 consists of 3 essay questions, worth 15
points each.
For the first question:
You are asked to identify 2 unique companies - one that you
believe pursues a lowest-cost strategy and another that pursues
a differentiation strategy.
Relying on personal knowledge, company annual reports, or
articles in newspapers and business periodicals, discuss these
companies' competitive strategies.
In this discussion thread, you will share with the class the 2
companies you have selected for your analysis. Each student is
expected to select 2 unique companies - in other words, each
company can be used only once for the question. So my
suggestion is to select early and post here - the first student who
selects the company will be allowed the use of that company. At
that point, different companies must be selected.
student 1
A company that pursues the lowest-cost strategy would be
Walmart, which I am sure comes to everyone's mind when
thinking about this topic. If you are looking to buy products at
the lowest price possible, Walmart is where to go. They can
offer their products at “Everyday Low Prices” just as their
slogan suggests on a large scale. Walmart can keep their prices
low by the enormous volume of sales and the large customer

2. base. Walmart cost-effectively manages its supply chain.
“Supply chain management based on electronic product
information, vendor role in distribution, and layout of
warehouses: Walmart has a supply chain system that is regarded
in multiple quarters as one of the most technologically advanced
and efficient” (Hyde, 2018). In my opinion, Walmart sometimes
has a bad reputation for not being the nicest looking or lacking
cashiers, but that does not seem to matter as the price seems to
drive their sales and people are taking advantage of their prices
and products. I believe the growth for e-commerce will only
help their sales and keep them on the top as a company that
offers the lowest prices around.
A company that comes to mind that pursues the
differentiation strategy is Chipolte Mexican Grill. Their number
one focus is the quality of the ingredients that go into their
food. Chipolte will not have the cheapest fast food but it will
have the best quality ingredients compared to its competitors.
According to Herosmyth (2020), Chipolte uses local and
sustainable ingredients and pride’s itself in working with family
farmers that are located within a 130-mile radius of each
restaurant location. They also offer non-GMO ingredients that
help them stick out from the rest. As their food is not the
cheapest, their differentiation strategy is working as they are
one of the top Mexican fast-food restaurants in the US.
Compensation professionals that utilize the differentiation
strategy need to focus on their client’s needs and beliefs to be
successful as the cost of the products is not the top influencing
factor. Why would a customer want to buy our product even
though you can find similar products for less? Whereas the
success of the lowest-cost strategy is solely reliant on the cost
of the products. The customer service and company values may
not be as important as the price is driving the sale. How do we
keep the price of production and distribution low and still offer
our employees a competitive advantage while keeping the prices

3. low? Both Walmart and Chipolte manage their compensation
remarkably and that is why they are two very successful
companies. I believe they do a good job of managing the
changing customers and environment while sticking to their
core values (Chipolte) and offering the lowest prices (Walmart).
References
Herosmyth. (2020, February 24). 9 perfect brand examples of
why it pays to differentiate. Herosmyth.
https://www.herosmyth.com/article/9-perfect-brand-examples-
why-it-pays-differentiate (Links to an external site.)
Hyde, R. R. (2019, June 25).
How Walmart model wins with everyday low prices
. Investopedia.
https://www.investopedia.com/articles/personal-
finance/011815/how-walmart-model-wins-everyday-low-
prices.asp (Links to an external site.)
student 2
Amazon has an amazing pricing strategy they have been using
over the years. When Amazon first started out in 1995, it was
in selling books at low prices. Then the company evolved to e-
books and priced below whole sale costs for their Kindle
platform. I became a fan of Amazon when I started going to
school and I relied heavily on ordering my textbooks and
needing them delivered within two days. Amazon has become a
leader in providing on-time delivery, easy payment options and
tens of thousands of items available to purchase. When the
COVID-19 pandemic hit and everybody hunkered down at home
and started shopping on line for essential supplies, Amazon
brought in $75.4 billion in revenue, a 26% gain over 2019.
(Dumaine, 2020) The company continues to offer low prices,
black Friday specials and more discounts when you join

4. Amazon Prime.
Stunning, hand crafted pieces of jewelry designed by Tiffany &
Co is an example of a differentiation strategy. Founded in
1837, Tiffany & Co has become known for their exquisite and
timeless designs that are appreciated by wealthy and affluent
customers. One trademark logo of the company that definitely
differentiates itself is the iconic blue box. The companies
annual report reflects, Tiffany & Co. had a total revenue of
$4,424 million for the 2020 fiscal year and they continue to
produce high quality work of luxury brand jewelry.
Compensation professionals have several tasks that they are
responsible for to ensure companies are operating smoothly.
Amazon is going to need to ensure their company is cost
effective and attractive to recruit and retain new employees.
When Amazon was ramping up for the pandemic, they hired
175,000 additional employees to help with the added business,
but ended up having issues with unsafe working conditions.
Ensuring the company is legally consistent and complying with
all employment requirements will also be handled by
compensation professionals. Amazon and Tiffany & Co. are
very successful companies and will continue to grow in the
future and be around for a very long time.
References
Dumaine, B. (2020). Amazon was built for the pandemic.
Fortune, 181
(6), 86-92. Retrieved from
https://search.ebscohost.com/login.aspx?direct=true&db=buh&
AN=143213401&site=ehost-live
Engle, P. (2015). Why do we love amazon?
Industrial Engineer, 47
(10), 20. Retrieved from

5. https://search.ebscohost.com/login.aspx?direct=true&db=aph&A
N=110379625&site=ehost-live
Reimers, I., & Waldfogel, J. (2017). Throwing the books at
them: amazon's puzzling long run pricint strategy.
Southern Economic Journal, 83
(4), 869-885. doi:10.1002/soej.12205
Tiffany & Co SWOT Analysis. (2020).
Tiffany & Co. SWOT Analysis
, 1-7. Retrieved from
https://search.ebscohost.com/login.aspx?direct=true&db=buh&
AN=145278029&site=ehost-live.
student 3
McDonald's is a company that uses the lowest-cost strategy as
its low-cost pricing often out beats other fast-food chains.
Customers visit McDonald's for their low-price drinks, value-
menu options, and fast food deals. "We know that customers
motivated primarily by value and deals come more often and
spend more," McDonald's Chief Executive Steve Easterbrook
(Gasparro, 2017). McDonald's was not as competitive over the
years without their famous dollar menu, but continuing with
customizable burgers and deals is still cheaper and popular than
other fast-food restaurants. The company has also invested in
better fresh ingredients, implementing breakfast and coffee
options, self-order kiosks, remodeling, and now mobile
ordering. By updating the McDonalds image has allowed the
company to keep the same low-cost options and has since
improved sales.
The company that pursues the differentiation strategy would be
Apple. Apple is well known for this strategy as the company
focuses on making its products unique and appealing to various
consumers. While there are many other competitors, Apple

6. continues to succeed in its product demand. Due to this demand
for their products, Apple has power over their prices. "By
focusing on customers willing to pay more and maintaining a
premium price at the cost of unit volume, Apple also set up an
artificial entry barrier to competitors" (Nielson, 2014). Apple
allows its products to be sold to third-party retailers such as
Wal-Mart or Best Buy, but customers still pay original retail
prices. By offering this options to these retailers, Apple can
ensure other competitors do not have an advantage over others
and while continuing to make money.
The lowest-cost strategy is used within companies to offer the
actual lowest cost in products within the marketplace. The main
focus of McDonald's compensation professionals would be
providing exemplary service and appearance while offering low -
cost products. The current pandemic has hit the fast-food
industry hard as the decline in profits has abruptly stopped.
With the decline in cases within the select areas, many fast-food
restaurants like McDonald's has since created ways to continue
businesses while social distancing. Mobile dining apps such as
DoorDash or Grubhub have allowed McDonald's to continue
offering their services while offering low-cost products. With
the differential strategy, the primary approach is to create new
and unique products that attract customers over other
competitors. Apple develops many devices for their customers,
knowing they will buy the products based on quality.
Compensation professionals at Apple need to ensure that
continual quality is presented within their products and remain
competitive against other companies.
References
Gasparro, A. (2017, October 24). McDonald's focus on low
Prices brings in customers. Retrieved February 11, 2021, from
https://www.wsj.com/articles/mcdonalds-profit-rises-
refranchising-drive-dents-revenue-1508851452 (Links to an

7. external site.)
McDonald’s Corp SWOT Analysis. (2019).
McDonald’s Corporation SWOT Analysis
, 1–8.
Nielson, S. (2014, February 16). Apple's premium pricing
strategy and product differentiation. Retrieved February 11,
2021, from
https://finance.yahoo.com/news/apple-premium-pricing-
strategy-product-191247308.html (Links to an external site.)
student 4
Ikea has long been recognized as a low-cost furniture provider.
Idea provides itself on providing fashionable, functional, and
affordable housewares items. They have gained a competitive
advantage by reducing prices and still providing a vari ety of
options. Ikea specializes in a culture that is focused on the
lowest costs; this includes the manufacturing process. Ikea’s
goals are focused on affordability, sustainability, design, and
functionally (Terry-Armstrong, 2012). They also focus on
overall efficiency requiring the time to be flat-packed. To
further increase efficiency, Ikea utilized robots that can pack
720 units per hour, providing a significant competitive
advantage over other housewares and furniture
providers (Terry-Armstrong, 2012). Additionally, Ikea provides
little in custom orders, allowing them to maximize IT structure
and supply chain management. Items are manufactured in bulk.
LUSH cosmetics offers cosmetics and toiletry items that are
fresh, handmade, and often organic. Lush focuses on clean and
ethical buying that is sustainable and never tests on animals.
LUSH stores are visually inviting and vibrant. LUSH’s
differentiation strategy allows them to focus on premium prices

8. since their concept is stand-alone (Lush Brand Positioning &
Differentiation, 2016). LUSH’s culture focuses on social and
corporate responsibility, boasting sustainability and
environmental impact. LUSH boosts its brand values and
attracts more socially aware consumers.
Compensation professionals contribute immensely to the overall
compensation strategy and culture of an organization. Although
Ikea offers low cost to their customers, employees are rewarded
greatly through a robust benefits package including 26 paid
maternity leave after two years of employment (Australia), four
weeks of paid paternity leave after two years of career, and
optionally 12-month maternity leave at half-pay (Terry-
Armstrong, 2012). Ikea focuses on work-life balance and a
robust retention culture. However, additional add-ins like an
extra contribution to pension funds and pay-for-performance
bonus programs (Work with Us – Benefits, n.d.). Ikea's
compensation strategies help reward retention and provide
benefits that support the work/life balance culture. LUSH’s
compensation strategy includes employee discounts for retail
items, structured bonus incentives, stock options, and equity
incentive programs. LUSH provides a do-good culture that
provides for charitable giving and sustainability efforts like
funding project that supports their overall culture. LUSHs
compensation strategy ties directly to the culture of the
organization.
References
Lush brand positioning & differentiation
. (2016, November 15). Why, Hello Sweet.
https://whyhellosweet.wordpress.com/2016/11/15/brand-
positioning-differentiation/ (Links to an external site.)
Terry-Armstrong, N. (2012). IKEA: the homeware category
killer.

9. BusiDate
,
20
(2), 6–8.
Work with us – benefits
. (n.d.). ikea.com. Retrieved February 11, 2021, from
https://www.ikea.com/us/en/this-is-ikea/work-with-us/benefits-
pub8c6da021
student 5
A company that pursues a differentiation strategy is Whole
Foods. Whole foods achieves this strategy through its "main
selling point, the organic or natural characteristics of its
products." (Thompson, 2017). Through this strategy, Whole
Foods aims its focus on the increasing market of going green.
Setting up shops that are unique and community focused Whole
Foods strives to be different in their product offering based on
the local flavor of each geographical area they lay brick. A key
to the differentiation strategy for Whole Foods is their "strict
quality standards for products" (Thompson, 2017). Each product
on the shelves needs to meet rigorous standards which leads to a
higher average cost in product when compared with other
grocery stores.
A company that pursues a lowest-cost strategy is Costco
Wholesale. Costco's strategy entails "maintaining the lowest
price possible" (Gregory, 2017). Costco operates as a member -
only institution. A customer needs to have purchased a
membership prior to checking out of their stores. As a side note,
my wife and I tried to use her parents membership card on a
visit and were nearly turned away. Costco offers products
mostly in bulk to lower the price per unit. For example, you are
able to purchase a 12 pack of macaroni and cheese which saves
you a few cents per box had you just gone to Walmart and

10. bought 4 packs. Costco also offers its own Kirkland brand of
products which are typically rejects from more well known
brands that for one reason or another did not meet a certain
standard. For example, Kirkland brand batteries are actually
repackaged Duracell batteries according to Yahoo.
Reference
Gregory, L. (2017, March 25). Costco's mission, business
Model, strategy & Swot. Retrieved February 12, 2021, from
http://panmore.com/costco-mission-business-model-strategy-
swot#:~:text=Costco's%20generic%20strategy%20is%20cost,it
%20from%20other%20retail%20firms.
Thompson, A. (2017, January 31). Whole foods Market's
generic & Intensive growth strategies. Retrieved February 12,
2021, from http://panmore.com/whole-foods-market-generic-
strategy-intensive-growth-strategies
student 6
An example of a company that engages in the lowest-cost
strategy is Menards. The hardware company, Menards, says it
right in their advertisements, “Save big money at Menards.”
Menards uses various methods to achieve low prices. Menards
insists on low prices from their suppliers to pass those savings
on to customers and manufacture several building materials,
including steel siding and roofing (Klein, 2018). Menards also
uses their rebate offers, in the form of an in-store credit, to
build customer loyalty.
In the case of Menards, compensation professionals
would want to design a compensation system that enables stores
to hire both full-time and part-time workers with a variety of
skills, including knowledge of home-improvement, hardware,
and customer service. The compensation strategy should include

11. a competitive base-wage and benefits package to attract and
retain quality full-time employees. A pay-for-knowledge
program might be beneficial to build up high-quality
management. Part-time employees would be an essential part of
a retailer like Menards. A competitive hourly wage can help to
attract these employees.
Tesla is an example of a company that uses a
differentiation strategy. Tesla stands out in the automotive
industry for several reasons. They are not the only company that
makes electric vehicles, but Tesla’s products are different
because of “the possibility to customize your car; regular
software updates; solar panels and supercharging compatibility;
and self-driving features” (
11 Amazing Differentiation Strategy Examples (in 2021) -
MKTOOLBOXSUITE.COM
, n.d., 5 section). Another significant differentiation is Tesla’s
cost of ownership. Tesla vehicles have a considerably smaller
number of parts, by some estimates about 20 compared to 2,000
in an internal combustion engine vehicle (
How Tesla Sets Itself Apart
, 2020). These unique features allow Tesla to adopt the
differentiation strategy.
A compensation professional working with Tesla would
help design a compensation strategy that attracts creative,
innovative employees. This type of company would want to
attract and retain highly skilled employees, so they would need
to offer competitive wages, benefits, and perhaps an incentive
pay program for new, innovative ideas.
References
11 amazing differentiation strategy examples (in 2021) -
mktoolboxsuite.com. (n.d.). mktoolboxsuite.com.

12. https://mktoolboxsuite.com/differentiation-strategy-
examples/ (Links to an external site.)
How tesla sets itself apart. (2020, February 28). Harvard
Business Review.
https://hbr.org/2020/02/how-tesla-sets-itself-apart (Links to an
external site.)
Klein, K. (2018, April 26).
A 360-degree view of menards - hardware retailing
. Hardware Retailing.
https://www.hardwareretailing.com/menards-360/ (Links to an
external site.)
Top 7 brilliant cost leadership examples (in 2021) -
mktoolboxsuite.com. (n.d.). mktoolboxsuite.com.
https://mktoolboxsuite.com/cost-leadership-examples/ (Links to
an external site.)