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

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1What is Strategy?Chapter 4: Business-Level StrategyBUSA 4980 (Strategic Management)Dr. Steven DionneSpring 2020
What is Business-LevelStrategy?Business-level strategy is the core decision about strategyIt more narrowly defines how the company plans to engage its competitive environmentProviding value to customers and gaining competitive advantage by exploiting core competenciesin individual product marketsKey issue revolves around understanding the customers to be served and their specific needs2The External EnvironmentThe Internal OrganizationDevelop Vision / Develop Vision / Mission; Set Mission; Set ObjectivesObjectivesCraft Strategy to Craft Strategy to Achieve Vision and Achieve Vision and ObjectivesObjectivesStrategic InputsStrategy FormulationSWOT
Business-Level Strategyis not as comprehensive as defining strategy across the Five Main Elements31.Where will we be active?StagingVehiclesEconomic Logic
2.How will we get there?ways to differentiate that command premium prices?
3.How will we win?Premium prices due to unmatchable service, proprietary product features, etc.
4.What will be our timing?
5.How will we obtain our returns?Premium prices due to unmatchable service, proprietary product features, etc.
Target a broad or narrow segment of buyers?Seek to lower costs or find ways to differentiate that command premium prices?
Five Generic Business-Level (BL) StrategiesLower CostDistinctivenessBroad Cross-Section of BuyersNarrow Segment of Buyers1. Cost Leadership2. Differentiation3. Focused Cost Leadership4. Focused Differentiation5. Integrated Cost Leadership / DifferentiationType of Competitive Advantage Pursued(Basis for Customer Value)Competitive Scope4“Distinctiveness” refers to creating value through non-price methods of differentiating from rivals, which allows the company to command premium prices
Achieving Competitive AdvantageRequires a BL Strategy that addresses three key questions …

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