Session 12 Business-Level Strategy (2)

Session 12 Business-Level Strategy (2) - MGO 403 Strategic...

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Oct. 12, 2015 Business-Level Strategy (2) MGO 403 Strategic Management
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Combination Strategy Industry Life Cycle
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McDonalds Wal-Mart Harley Davidson Apple Rolex Lamborghini Southwest Airlines Ikea Traditional Supermarket such as Kroger, Ralphs and Albertsons
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Firms that identify with one or more forms of competitive advantage outperform those that do not.
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Combination Strategy: Integration of cost leadership and differentiation strategies Originally, low cost and differentiation were treated as either-or strategies o Trade-offs exist since providing differentiation often comes with higher costs However, several firms have succeeded in improving their differentiation and cost structure simultaneously o E.g. Toyota’s Lexus division Useful to think of competitive positioning along a continuous scale that incorporates both o the price premium possible through differentiation and o an emphasis on cost considerations
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Three Approaches to combining Automated and Flexible Manufacturing System o Mass Customization: Lower costs of production processes + flexibility of customization o e.g., interactive computer version of paper catalogs Exploit the profit pool concept for competitive advantage o A profit pool is defined as the total profits in an industry at all points o e.g., Go into financing and extended warranty operations Coordinating the “Extended” value chain by way of information technology o link own value chain with the value chains of customers and suppliers by information technology
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