Ch5 - The Management of Strategy (Concepts and Cases) Part...

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1 The Management of Strategy (Concepts and Cases) Part II: Strategic Actions: Strategy Formulation Chapter 5: Strategy at the Business Level
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2 The Strategic Management Process
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3 Chapter 5: Strategy at the Business Level Overview: Five content areas Defining business-level strategy Relationship between customers and strategy Differences in business-level strategies 5-Forces Risks of business-level strategies
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4 From Pet Food to PetSmart PetSmart remained on top of the pet care industry despite fierce competition from PETCO (#2) and major retailers including Wal-Mart and Target Focus: Customer service Strategy Opened doors in 1987 and named ‘PetFood Warehouse’ (warehouse format) 1989 changed warehouse strategy to become “MART for PETs that’s SMART about PETs” Focus: Providing best selection of products at the best prices Market research indicated average dog owner could spend > $15,000 over the lifetime of a pet -- so, by 2000 developed…. …a new strategy: “Engaging the Enthusiast’” and …a new vision: “…to provide Total Lifetime Care for every pet, every parent, every time.”
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5 From Pet Food to PetSmart 2001: Began extensive customer training program for associates By 2005: new focus Top executives decided to leave behind the “mart” concept Move to providing “Smart” solutions and information Change name to “PetSmart” and create new logo
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6 Chapter 5: Strategy at the Business Level Overview: Five content areas Defining business-level strategy Relationship between customers and strategy Differences in business-level strategies 5-Forces Risks of business-level strategies
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7 Introduction Strategy: Increasingly important to a firm’s success and concerned with making choices among two or more alternatives. Choices dictated by External environment Internal resources, capabilities and core competencies Business level-strategy: Integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets
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8 Introduction (Cont’d) Customers are the foundation of successful business strategies Who will be served by the firm What needs those target customers have that firm will satisfy How those needs will be satisfied by the firm Five (5) generic business level strategies Generic = can be used in any organization competing in any industry Follows the discussion of customers
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9 Customers: Their Relationship with Business-Level Strategies Strategic competitiveness results when firm can satisfy customers by using its competitive advantages Returns earned are the lifeblood of firm Most successful companies satisfy current customers and/or meet needs of new customers
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10 Customers: Their Relationship with Business-Level Strategies (Cont’d) …Five components in customer relationships
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Ch5 - The Management of Strategy (Concepts and Cases) Part...

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