Research On Cost Leadership Strategy Of Tyden

Cost leadership Strategy means a company tries to achieve the lowest cost in its industry by a series of activities.The key points of this strategy are to optimize its value chain and use its resources high efficiently.With the cost advantage achieved,the company gains more market share or profit.Tyden is a cargo security seal maker locates in the middle of the United States.The functions of the seal are to tracking the cargo shipment and ensure it's not tampered during the transportation.The seals from all companies of the industry are all very similar and difficult to create differentiation.Facing the low-price pressure from its Asian competitors, Thden made the cost leadership strategy.By a series of strategic actions,like internationalization,backward vertical integration,Tyden regained get out of the difficulties and re-gained its position in the industry.The 1^st part of this paper is analysis and decision making.Firstly,the author analyzed the PEST circumstances of the cargo surity seal industry.Then the paper analyzed the competitive situations in the industry with the five force model of Porter.And the paper also studied the advantages & disadvantages,opportunities & threats.Finally the cost leadership strategy was selected out.The second part of the paper is the implementation of the strategy.To achieve the cost-price competitive edge,Tyden set up its manufacturing base in China to reduce the labor cost.Then minimized the material cost by vertical integration.To control the cost impact of Zinc,Tyden fixed the price by hedging in the futures market.And to reduce the negative impact of tax refund policy in China,Tyden moved into EPZ in 2008.To make sure the strategy implemented smoothly and efficiently,Tyden also change the organization and create some incentive systems and programs.