Ch04MBA - Chapter 4: Business-Level Strategy Overview:...

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1 Chapter 4: Business-Level Strategy Overview: Defining business-level strategy Risks of business-level strategies Differences in business-level strategies 5-Forces Relationship between customers and strategy
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2 The Strategic Management Process
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3 Introduction Strategy: Increasingly important to a firm’s success and concerned with making choices among two or more alternatives. Choices dictated by External environment (O and T) Internal resources, capabilities and core competencies (S and W) 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/industry How we intend to compete in a specific industry
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4 Business-Level Strategies Purpose: To create differences between position of a firm and its competitors Firm must make a deliberate choice to Perform activities differently Perform different activities How value chain activities will be performed to create unique value No strategy better than others Contingent on internal and external environment
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5 Business-Level Strategies Two types of competitive advantage firms must choose between Cost (Are our costs LOWER than rivals costs?) Uniqueness (Are we DIFFERENT than rivals ? How?) Two types of ‘ competitive scope’ firms must choose between Broad target Narrow target These combine to yield 5 different generic business level strategies Can potentially be used by any organization competing in any industry
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6 Five Business-Level Strategies
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7 Types of Business-Level Strategies Cost Leadership Strategy Competitive advantage: THE low-cost leader and operates with margins greater than competitors Competitive scope: Broad Integrated set of actions designed to produce or deliver goods or services with features that are acceptable to
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Ch04MBA - Chapter 4: Business-Level Strategy Overview:...

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