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At such a point in time when the world has become a global village, and when companies need to put extra efforts to get noticed by the customer, it is important for a company to stay focused.
SKF, the company which is the focus of this report, needs to maintain a consistency strategy when it comes to the future and what it aims to do with respect to the new decision that it has to make. SKF needs to maintain the strategy that they have been using till now, that is, to price their product at a premium price and play on value based selling, that is, they have designed and developed their product so well that it comes out to be one of the best in the industry and the perception that they have created in the eyes of the consumer is that of a premium product which cannot be easily replicated by any other company. It is important for companies to follow such a strategy in this clutter filled world, and where product differentiation can only be done in perceptions, and not in reality.
SKF is thinking of changing its value based strategy to the strategy where it will compete on price and cater to the markets where price is an important factor. This will be a very wrong strategy for SKF, since till now, they have been premium priced and price was never a factor that they even considered. Customers came to SKF when they wanted true value for whatever money that they give. There will be value that will be reflected in the products that they receive. It was a win-win situation for both the consumers and the SKF Company. But this decision to change the strategy to compete on price would take the organization into a wrong direction, and they need to correct themselves as soon as possible.
One of the first things that they need to remember is that there should be consistency in the strategy of a company, especially when the strategy has helped the company build the brand name that it has, and has helped it secure the
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