STRATEGIC MANAGEMENT Cost Leadership Strategies Cost leadership entails standardization by reducing costs. On the other hand, Strategic management enhances low-cost production for given levels of quality since the low-cost leadership targets broad markets (Peny 2013, p. 45). The three primary cost leadership strategies used include competitive advantage strategy, differentiation strategy and focus strategy in the management of businesses and organizations (Hill, Jones & Schilling 2014, p. 33). The essay focuses on BHP Billiton strategic report 2014, based the analysis of the three cost leadership strategies in the management of BHP Billiton Company. Consequently, in strategic management of cost leadership, only rare and valuable resources can be sources of competitive advantage (Porter 2010, p. 2).
In BHP Billiton Company, their ability to profitably transport their petroleum and minerals as valuable resources incorporate their competitive advantage strategy under cost leadership. Besides, oil and minerals from BHP Billiton Company are rare and precious resources that enable standardization of costs hence incorporating competitive advantage in cost leadership management. Differentiation strategy entails the development of services and products that offer unique attributes (Barney 2001, p. 41). The development of services and outputs allows for cost leadership by controlling costs of goods and services.
In BHP Billiton Company, development of goods and services is through distribution and selling of products with regulation of financial risks associated with revenue in Market. Therefore, differentiation is a form of cost leadership that assists in the sale of products and services in the market Additionally, focus strategy narrows on a particular segment of cost leadership to achieve cost differentiation and advantage (Hitt, Ireland & Hoskisson 2014, p. 22). Furthermore, the needs of a group or company become better by focusing entirely on a particular segment in managing cost leadership strategy in the management of companies or groups.
BHP Billiton Company focuses on improvement of productivity across all aspects of their businesses, hence enabling them to achieve cost advantages and differentiation in the market. BibliographyBarney, J. B 2001, Is The Resource-Based “View” A Useful Perspective For Strategic Management Research? Yes, Academy Of Management Review, 26, 1, pp. 41-56. Hill, C., Jones, G., & Schilling, M 2014, Strategic Management: Theory: An Integrated Approach, Stamford, CT: Cengage Learning. Hitt. , M., Ireland, D., R, & Hoskisson. , R 2014, Strategic Management: Concepts: Competitiveness And Globalization, Stamford, CT: Cengage Learning. Peny, M 2013, Global Strategy, Stamford, CT: Cengage Learning. Porter, M., E.
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