Slides%204%20Business%20Level%20Generic%20Strategies%20and%20Competitive%20Dynamics

Slides%204%20Business%20Level%20Generic%20Strategies%20and%20Competitive%20Dynamics

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Strategic Management/ Business Policy Slides 4 Business Level Strategy,  Slides 4 Business Level Strategy,  Generic Strategies and Competitive  Generic Strategies and Competitive  Dynamics Dynamics
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0 5 0 10 15 20 25 % 100% Share of industry revenue Auto loans Leasing Warranty Gasoline Auto insurance Aftermarket parts Auto rental Operating margin Auto manufacturing New car dealers Used car dealers Service & repair Vertical Segmentation & Industry Profit Pools —The US Auto Industry
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Forms of Competitive Advantage: Competitive Advantage Cost  Advantage Differentiation Advantage Similar Product At Lower Cost Price Premium From Unique Product
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Business Strategy and Competitive Advantage Business Strategy and Competitive Advantage business-level strategy  is an  integrated and coordinated set of  commitments and actions designed to  provide value to customers and gain a  competitive advantage by utilizing core  competencies in specific individual  product markets.
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Business Strategy and Competitive Advantage Business Strategy and Competitive Advantage To achieve competitive advantage, we need  to match a firm’s resources and capabilities to  the industry and competitive environment. Position the firm so that we use our resources  and capabilities in such a way that we provide  value to our customers and make it difficult  for others to imitate us.
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Business Strategy and Competitive Advantage Business Strategy and Competitive Advantage Two fundamental questions: How do you generate  advantage? How do you sustain  advantage? Key idea for sustainability is “ barriers  to imitation.” How long will it be before the first rival imitates  the first mover? How fast does new imitation occur once it starts? These two factors determine  appropriability.
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Business Strategy and Competitive Advantage Business Strategy and Competitive Advantage Consider three strategies in terms of  two fundamental principles (that is,  generating  advantage and  sustaining  advantage): Market Share Learning curves Corporate Culture
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Business Strategy and Competitive Advantage Business Strategy and Competitive Advantage Does market share  generate  competitive  advantage? The computer industry is an excellent example of  the lack of correspondence between market  share and profit rates.     IBM was a clear market  leader in terms of market share but had only  mediocre profit performance relative to its rivals.   Market share is no guarantee of success.
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Business Strategy and Competitive Advantage Business Strategy and Competitive Advantage When can market share work  to generate and sustain an  advantage?
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Slides%204%20Business%20Level%20Generic%20Strategies%20and%20Competitive%20Dynamics

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