Chapter 4: Business-Level Strategy Chapter 4 Business-Level Strategy KNOWLEDGE OBJECTIVES 1.Define business-level strategy. 2.Discuss the relationship between customers and business-level strategies in terms of who, what, and how. 3.Explain the differences among business-level strategies. 4. Use the five forces of competition model to explain how above-average returns can be earned through each business-level strategy. 5.Describe the risks of using each of the business-level strategies.CHAPTER OUTLINE
Chapter 4: Business-Level StrategyLECTURE NOTESChapter Introduction: Firms that perform well, even in very competitive industries, willfollow some pattern of decision-making and execution that is internally consistent. That is,the firm will line up its resource commitments in a way that reinforces the direction of theenterprise. If these decisions are inconsistent, the outcome will be resource commitmentsthat work against one another and hinder the progress of the business. This chapter will layout the basic strategy patterns that can lead to competitive advantage. Knowing these willhelp students understand how to make the most of the firm’s potentials.OPENING CASEFrom Pet Food to PetSmartThis opening case epitomizes being in touch with customers and responding to their needs and values which is paramount in business level strategy. It also explains and demonstrates how PetSmart has “evolved” at a very rapid rate. Twenty years ago (1987), PetFood Warehouse opened two warehouse stores. Over the next two years, the company changed its warehouse strategy to become a “MART for PETs that’s SMART about PETs.” The name and logo were changed to “PetsMart.” The focus was providing the best selection of products at competitive prices. By 1994, PetsMart had changed its slogan to “Where pets are family.” By 2000, the company realized importance of its services to pet owners (referred to as “pet parents”) and developed a new vision statement: “To provide Total Lifetime Care for every pet, every parent, every time.” In 2001, PetsMart began an extensive associate training program (the company’s name for employees). Associates were trained to identify customers’ needs and how to provide solutions. By 2005, top executives decided to leave the “mart” concept and move to a new focus on providing “Smart” solutions and information. The name was changed to
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