Chapter 04

Chapter 04 - KnowledgeObjectives Define business-level...

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4–1 Knowledge Objectives Define business-level strategy. Discuss business-level strategies in terms of who, what, and how. Use five forces of competition model to explain how above-average returns can be earned through each business-level strategy. Describe risks of using each business-level strategy.
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4–2 Business-Level Strategic Issues: Customers Customers: the foundation of successful business-level strategy! Who will be served by the strategy? What needs of the target customers will the strategy satisfy? How will those needs be satisfied by the strategy? Only firms with capacity to continuously improve, innovate and upgrade their core competencies can expect to meet (or exceed) customers expectations across time.
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4–3 Five Business- Level Strategies Figure 4.1 Figure 4.1 SOURCE: Adapted with the permission of The Free Press, an imprint of Simon & Schuster Adult Publishing Group, from Competitive Advantage: Creating and Sustaining Superior Performance, by Michael E. Porter, 12. Copyright © 1985, 1998 by Michael E. Porter.
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4–4 Cost Leadership Strategy An integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost (relative to competitors) Relatively standardized products Features acceptable to many customers Lowest competitive price
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4–5 Cost Leadership Strategy Requires cost saving actions: Build efficient scale facilities Tightly control production costs and overhead Build efficient manufacturing facilities Monitor costs of activities provided by outsiders Simplify production processes
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Chapter 04 - KnowledgeObjectives Define business-level...

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