Chapter 4 - Business-level strategy. The contents of this chapter include all of the following: Defining business-level strategy, risks of business-level strategies, differences in business-level strategies, 5-forces, relationship between customers and strategy. | Chapter 4: Business-Level Strategy Overview: Defining business-level strategy Risks of business-level strategies Differences in business-level strategies 5-Forces Relationship between customers and strategy Introduction Strategy: Increasingly important to a firm’s success and concerned with making choices among two or more alternatives. Choices dictated by External environment (O and T) Internal resources, capabilities and core competencies (S and W) Business level-strategy: Integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets/industry How we intend to compete in a specific industry or product market Business-Level Strategies Purpose: To create differences between position of a firm and its competitors Positioning and strategic group mapping Firm must make a deliberate choice to Perform activities differently Perform different activities This choice impacts . | Chapter 4: Business-Level Strategy Overview: Defining business-level strategy Risks of business-level strategies Differences in business-level strategies 5-Forces Relationship between customers and strategy Introduction Strategy: Increasingly important to a firm’s success and concerned with making choices among two or more alternatives. Choices dictated by External environment (O and T) Internal resources, capabilities and core competencies (S and W) Business level-strategy: Integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets/industry How we intend to compete in a specific industry or product market Business-Level Strategies Purpose: To create differences between position of a firm and its competitors Positioning and strategic group mapping Firm must make a deliberate choice to Perform activities differently Perform different activities This choice impacts how value chain activities are performed to create unique value No single strategy is better than others Contingent on internal and external environment Business-Level Strategies Two types of competitive advantage firms must choose between Low Cost (Are our costs LOWER than rivals costs?) Distinctiveness (Are we DIFFERENT than rivals?) Two types of ‘competitive scope’ firms must choose between Broad target Narrow target The combination of competitive advantage and competitive scope yield 5 major strategic options at the business level Each strategy can potentially be used by any organization competing in any industry Five Business-Level Strategies Types of Business-Level Strategies Cost Leadership Strategy Competitive advantage: THE low-cost leader and operates with margins greater than competitors Competitive scope: Broad Integrated set of actions designed to produce or deliver goods or services with features that are acceptable to customers at the lowest cost, .
