K201 Lecture portion

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  • Topic: Pricing, Fee
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Lecture K201
According to Michael Porter all firms and businesses engage in one of the four competitive strategies, those four strategies are: Lower cost across the industry, Lowest cost within an industry segment, Better product/service across the industry and Better product /service within an industry segment. Among the four competitive strategies aTiM engages in focusing within the industry segment by offering a specific type of product within the framework of art. For example, aTiM does not provide products/services for all types of artwork but focuses on ceramics, textiles and photography. aTiM also serves the Bloomington area supporting those artist from within the community and not across the country making their consumer base and artist base segmented from the rest of the art industry nationwide. This business strategy helps aTiM focus in developing their artists’ skills in order to make artwork that dominates this particular market both in a sense of the type of art that is produced as well to where the art is sold. If aTiM selects a cost strategy rather than a differentiation strategy, they would have to lower the cost of the artwork they are currently selling. However, doing so will greatly damage the revenue source for aTiM.. In addition, differentiating their services does not only have to refer to customers but also artist. Whether the artist is local or is from out of town, once aTiM provides best services for artwork promotion, low service rates will lead to a higher rate of artworks sold with more and more artist wanting to join the aTiM team, resulting in high profit margins for aTiM. With more artists wanting to team up with aTiM they will then have the ability to spend less on paying their artists, lowering their overall costs.

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