Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 6

Strategy; Execution In recent years, a large retailer of auto parts, Best Parts, Inc. (BPI), was looking for ways to invest an accumulation of excess cash. BPI's success was built on a carefully developed inventory control system that guaranteed the availability of a desired part on demand 99% of the time and within one business day for the remaining 1%. The speed and quality of service set BPI apart from other parts dealers, and the business continued to grow. On the advice of close friends and consultants, BPI's owner and CEO decided to invest a significant portion of the excess cash in a small chain of gift and craft stores in shopping malls.
Required
1. Determine BPI's competitive strategy (cost leadership or differentiation) in the auto-parts business. Assess whether this competitive advantage will or will not facilitate success in the new venture.
2. Explain two means that BPI can use to implement its strategy.