1. Business Economics
Course: Business Economics
Mr. Devinder Kumar
Assistant Professor
MSB, Department of Economics
Lovely Professional University
2. Production Strategy
• A product strategy is a high-level plan
describing what a business hopes to
accomplish with its product and how it plans to
do so. The strategy should answer key
questions such as who the product will serve
(personas), how it will benefit those personas,
and the company’s goals for the product
throughout its life cycle.
4. Types of Production Strategy
1. Differentiation Strategy
The company tries to be different and unique from its
competitors. It may offer better quality, quantity,
pricing, appearance, and after sales- services, when
compared to its competitors. It may offer more
features and facilities in its product. It may also offer
quick and better delivery of its products.
5. 2. Cost Leadership Strategy
Under a cost leadership strategy, the company tries to reduce it
cost of Production. This is done by producing goods on a very
huge scale. By doing so, the company will get the benefits of
economies of large scale. Higher the scale of production, lower
will be the cost of production.
3. Market segmentation Strategy
In market segmentation strategy, the company divides the market
according to the type of customers it has to focus and target. It
sell different products and services to different types of
customers. To achieve this goal, it produces and sells goods
and services as per the needs of customers. Therefore, market
segmentation strategy is called Focus strategy.
6. 4. Price or Cost Strategy
Under price or cost strategy, the company sells its product at a
very low price. This strategy is used when the products are
homogeneous in nature. That is, when the customers cannot
distinguish the company’s product from the competitors’
products. In this case, the company will fix a low price. So, the
customers will purchase the company’s product and not the
competitors’ products.
5. Quality Strategy
The company produces and sells high-quality goods and services.
The prices of such goods and services are naturally very high.
However, this strategy attract those customers who prefer top
quality product and ready to pay necessary appropriate prices.
To gain success in the market, the company must smartly
invest to make quality innovative products.
7. 6. Delivery Strategy
The company delivers its product and services to their
customers as early as possible that too within a fixed
time period.
7. Product mix or Flexibility Strategy
The company produces and sells a product mix. A
product mix is a group of products, which sold by the
same company. Here, the company does not depend
only on the product for its survival and growth.
8. Service Strategy.
9. Eco- Friendly Products.
