Chaper 4 Lecture - What is Strategy Chapter 4...

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1 What is Strategy? Chapter 4: Business-Level Strategy BUSA 4980 (Strategic Management) Dr. Steven Dionne Spring 2016
What is Business-Level Strategy? Business-level strategy is the core decision about strategy It more narrowly defines how the company plans to engage its competitive environment “It is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets 2 The External The External Environment Environment The Internal The Internal Organization Develop Vision / Mission; Set Mission; Set Objectives Objectives Craft Strategy to Craft Strategy to Achieve Vision and Achieve Vision and Objectives Objectives Strategic Inputs Strategy Formulation
Business-Level Strategy is not as comprehensive as defining strategy across the Five Main Elements 3 1.Where will we be active? 2.How will we get there? 3.How will we win? 4.What will be our timing? 5.How will we obtain our returns?
Five Generic Business-Level (BL) Strategies Lower Cost Unique Features 1. Cost Leadership 2. Differentiation 3. Focused Cost Leadership 4. Focused Differentiation 5. Integrated Cost Leadership / Differentiation Type of Competitive Advantage Pursued (Basis for Customer Value) Competitive Scope 4 “Unique Features” refers to creating value through non-price methods of differentiating from rivals, which allows the company to command premium prices
Achieving Competitive Advantage Requires a BL Strategy that addresses three questions … Are you delivering unique customer experience? “The secret to a good experience is not the multiplicity of features, but the value to customers from each feature” (Meyer & Schwager, 2007) Strategic competitiveness results only when a company satisfies a group of consumers Are you different from rivals? “Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value .” (Michael Porter, 1996) Are your capabilities costly to imitate?

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