Eckerd Essay

Competitive Strategy of Eckerd

According to Michael Porter, cost competitive leadership, product differentiation leadership, and focus leadership are strategies that are often used by companies. Companies choosing cost competitive leadership would focus more on cutting the cost to increase revenue. For those who select product differentiation leadership, how to make their product or service unique would become their question. And focus leadership means a company chooses to serve a specific range of customers or a specific product. Here we are going to discuss the strategy used by Eckerd by analyzing its activities. Drug store expansion In 1970s, Eckerd largely increased its store number by acquisition. In 1977, there were 766 stores and Eckerd became the second largest drug chain in the country. During this time, the drug store brought high profits for the company. In 1990, Eckerd again acquired 220 more drug stores and the store number became larger. No need to mention, if there exists a suitable strategy, these stores could help making Eckerd more competitive. Such large number of stores would bring high demand of drugs and other products and this might result in benefit such as a strong price negotiation power over all kinds of suppliers. And this could result in a lower price of their selling products. Even if they did not lower

Eckerd realized this situation and tried to make full use of it. In order to stimulate consumption, Eckerd placed a wide range of beauty care products on its shelves, set up an area with women cosmetic and fragrance near its store entrance. In 1998, Eckerd change its marketing direction primarily targeted at woman, with its new slogan “Right there with you”. It hoped to build strong bonding with its current and prospective female customers. Engaging in relationship marketing and customer loyalty, Eckerd also established a program to praise women