BA 469 lecture ch5 - Building Competitive Advantage through...

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Building Competitive Advantage through Business Level Strategy Chapter 5
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Levels of Strategic Management From Chapter 1
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Key Question for Each Level Corporate Strategy – what business(es) should the organization be in? Business Strategy – how should the organization compete? Functional Strategy – how should the organization’s resources be best employed to support business strategy?
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Business-Level Strategy How do we compete in this business?
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Business-Level Strategy Developing a firm-specific business model that will allow a company to gain competitive advantage over its rivals in a market or industry Customers’ needs Customer groups Distinctive competencies (how customers’ need will be satisfied)
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Customer Needs and Product Differentiation Customer needs Desires, wants, or cravings that can be satisfied through product attributes Product differentiation Designing products to satisfy customers’ needs Balancing differentiation with costs Ability to charge a higher price Different ways to achieve distinctness
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Customer Groups and Market Segmentation Market segmentation The way a company decides to group customers, based on their different needs or preferences Price Kinds of needs An evolving process
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Customer Groups and Market Segmentation (cont’d) Strategies to market segmentation Choose not to recognize that different groups of customers have different needs; serve the average customer Segment a market and develop a product to suit the needs of each segment Recognize that the market segments but concentrate on serving only one segment
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The Dynamics of Business- Level Strategy Make a consistent and compatible set of choices concerning: How to differentiate and price the product When and how much to segment the market to maximize demand Where and how to invest capital in order to create value while keeping cost structures viable (for competitive pricing)
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The Dynamics of Business- Level Strategy Source: Copyright © C. W. L. Hill and G. R. Jones, “The Dynamics of Business-Level Strategy,” (unpublished manuscript, 2002).
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Level Strategy Generic strategies All businesses can pursue them regardless of whether they are manufacturing, service, or nonprofit Can be pursued in different kinds of industry
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This note was uploaded on 10/22/2010 for the course BUS 496 taught by Professor Staff during the Spring '08 term at University of Nevada, Las Vegas.

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BA 469 lecture ch5 - Building Competitive Advantage through...

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