According to the industry statistics from IBISWorld report, Breville Group is neither a major player in household appliance wholesaling industry or kitchen wholesaling industry (IBISWorld company report, 2014). Although the market outlook does not look promising currently, the main task of Breville Group Ltd is to maintain their profit margin. Mr John Schmoll, the chairman of Breville Group Ltd said their strategy is focusing on product innovation, brand management, and expanding their distribution in the world (BGR, 2012).
There are mainly two generic ways to achieve competitive advantage for business, including cost leadership and differentiation. Cost leadership strategy is related to supply same product or service at…show more content… This brand aims to serve customer for good quality and durable product at a low price (IBISWorld company report, 2014). Also, the new CEO of the group has transferred product manufacturing to offshore outsourcing in order to lower their cost (Farina, 2015). This shows Kambrook use cost leadership strategy as they expand their product range, and lower input cost such as labour cost.
Horizontal integration strategy
Horizontal integration strategy involves the company creating or acquiring the products which are similar or complementary. Both Breville and Kambrook are supplying kitchen appliance, but they are in different brand level, different price and quality. This shows that Breville group Ltd apply horizontal integration strategy to increase their market share and be more competitive in kitchen industry.
Diversification…show more content… Breville will create a new type of household appliance which are all connected with internet, and also have invited a technology expert Jim clayton to be new CEO to push this project (Sue, The Sydney Morning Herald) This shows the Breville group use diversification strategy to increase their market share.
Overall, Briville group Ltd mainly combined cost leadership strategy and differentiation strategy when managing their business. They apply cost leadership strategy to low-end brand Kambrook, and apply differentiation strategy to the medium-end brand Breville. Hence, this firm is stuck in middle. Also, they use diversification, horizontal integration strategy to increase their marker share.
Risk
If a firm is stuck in middle, they have no clear strategy, being at a risk of not achieving a competitive advantage. For example, they supply high quality product which are differentiated from other competitors, it may undermine the quality of product if they use cost leadership strategy as well, because this may confused customers, although the product quality did not changed. Therefore, it is better for a Breville Group to choose one strategy for their business in long-term success. Also, there are some risk in diversification strategy as the Briville Group Ltd has no experience in managing the new product such as the household appliance connected
