Megabyte Centre (Scenario)
Your old friend Ariel Eskenazi is the owner and general manager of Megabyte Centre, a computer reseller and systems integrator located in Panama City, Panama. Since leaving IBM Canada to start a business in his home country, Ariel has watched his company grow steadily, due in large part to the business partnerships he's established over the years with large foreign computer and software firms, such as Goldstar and Microsoft. These relationships have helped his company win considerable market share in Panama, as well as in other parts of Latin America. However, in recent years, there has been a huge influx of foreign capital into Panama. For example, several large Asian firms have established subsidiaries in Panama to launch their North American operations. Tourism is also on the rise, and dozens of new hotels have been built in the metropolitan area over the past three years. As a result, demand for Megabyte's products and services has increased dramatically, but so has the level and diversity of its competition. While Megabyte's customer base has remained fairly loyal, many longtime customers are beginning to demand price concessions and enhanced service levels in return for their continued business. Ariel has recently learned that several of his former suppliers and business partners are considering establishing their own local sales offices in Panama City to sell direct to market rather than distributing through Megabyte. Ariel knows you are very knowledgeable about competitive strategy and asks for your advice. You begin by telling him a little about Michael Porter's competitive strategies framework.
-Ariel is thinking about closing down the retail side of his business and concentrating his resources on reselling hardware,software,and systems integration services to Latin American governments and public sector agencies.This is an example of which of Michael Porter's competitive strategies?

Question

Quizplus · Accepted Answer

Closing down the retail side of the business and concentrating on reselling to Latin American governments and public sector agencies is an example of the focus strategy in Michael Porter's competitive strategies framework. The focus strategy involves selecting a narrow target market and tailoring products or services to meet the specific needs of that market. In this case, Megabyte is focusing on a specific segment of the market (Latin American governments and public sector agencies) and tailoring its products and services to meet their needs.

Megabyte Centre (Scenario) Your Old Friend Ariel Eskenazi Is the Owner and General