The CK&M Company manufactures a robotic vacuum called the Robo2000. The company sells the vacuum to discount stores throughout the country. The Robo2000 is a basic robotic vacuum with a remote and is significantly less expensive than the robotic vacuum that requires a smartphone and app offered by the competitor, Stone Manufacturing. Furthermore, CK&M has experienced production problems that have resulted in significant rework costs. Stone’s model has an excellent reputation for quality.
Is CK&M’s current strategy that of product differentiation or cost leadership?
What about the strategy of Stone Manufacturing?
CK&M would like to improve quality and decrease costs by improving processes and training workers to reduce rework. CK&M’s managers believe that increased quality will increase sales.
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