Seeking competitive advantage through simultaneous pursuit of differentiation and cost leadership strategies: An investigation of the effect of Total Quality Management on competitive business strategy in the Kentucky bourbon industry

The competitive environment of the bourbon distilling industry in Kentucky has changed considerably over the past years. The number of competitors in the industry has declined to little more than a handful, and these competitors have changed the nature of competition through the introduction of small batch and ultra-premium bourbons. While the U.S. market for more standard bourbons continues to decline, both the domestic and international markets for premium labels continue to grow both in size and profitability. Simultaneously, others introduce highly competitive substitute products, while constituent groups such as MADD advise the public of the negative aspects of alcohol consumption.; Traditional competitive business strategy literature suggests that firms in such industries would concentrate strategic efforts to strengthen either their cost leadership or differentiation strategy. More recent theoretical contributions suggest that the pursuit of a single strategy may not create sufficient levels of competitive advantage for the firm. Contrary to the established literature, these newer theoretical contributions suggest that firms may need to pursue both cost leadership and differentiation simultaneously to succeed in the modern global markets.; This dissertation investigated, through an exploratory, multiple case study methodology, the simultaneous pursuit of cost leadership and differentiation strategies in the bourbon distilling industry in Kentucky. This research also investigated the effect of Total Quality Management (TQM) on the ability of the firm to pursue such strategies simultaneously. The results indicate that firms in this industry do appear to use both strategies simultaneously and that these same firms do use TQM as a methodology to attain the necessary levels of organizational resource coordination.; This research also suggested that the levels of coordination necessary for the simultaneous pursuit of competitive strategy could be attained through TQM implementation, which allows coordination of value chain activities, specifically, customer and supplier relationships, and the use of cross functional teams. While the data strongly supported the importance of cross functional teams, all firms placed considerable importance on both customer and supplier relationships.; Both researchers and practitioners must use caution when using the results of this study. The use of a single industry and the nature of the self-reported data used in this research limit the generalizability of the results. However, the results also indicate a significant need for continued study into this extremely important component of the competitive business strategy paradigm.