Wal-Mart's Sam's Club has recently outsourced 10,000 jobs (about 9% of Sam's Club's workforce) to independent marketing firms. The marketing firms provide in-store product demonstrations. Most of the 10,000 jobs were part-time jobs. Industry analysts say the change was a smart move because it allowed Sam's Club to focus on other key strategic issues, and because of the high costs of training, hiring, and managing the part-time workforce.

Required:

1. What type of strategy do you think Sam's Club follows, cost leadership or differentiation, and why?

2. Do you think Sam's Club's decision to outsource the product demonstration activity is consistent with the firm's strategy? Explain briefly.