CH04_INSTRUCTORMANUAL_HIH9E - Chapter 4: Business-Level...

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Chapter 4: Business-Level Strategy Chapter 4 Business-Level Strategy KNOWLEDGE OBJECTIVES 1. Define business-level strategy. 2. Discuss the relationship between customers and business-level strategies in terms of who, what, and how . 3. Explain the differences among business-level strategies. 4. Use the five forces of competition model to explain how above-average returns can be earned through each business-level strategy. 5. Describe the risks of using each of the business-level strategies. CHAPTER OUTLINE Opening Case Acer Group: Using a “Bare Bones” Cost Structure to Succeed in Global PC Markets CUSTOMERS: THEIR RELATIONSHIP WITH BUSINESS-LEVEL STRATEGIES Effectively Managing Relationships with Customers Reach, Richness, and Affiliation Who: Determining the Customers to Serve What: Determining Which Customer Needs to Satisfy How: Determining Core Competencies Necessary to Satisfy Customer Needs THE PURPOSE OF A BUSINESS-LEVEL STRATEGY TYPES OF BUSINESS-LEVEL STRATEGIES    Cost Leadership Strategy Differentiation Strategy Focus Strategies Strategic Focus Declaring War against Counterfeiters to Protect Product Integrity and Profitability Strategic Focus Kazoo Toys: Crisp Differentiation as a Means of Creating Value for a Certain Set of Customers Integrated Cost Leadership/Differentiation Strategy SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES VIDEO CASE NOTES 4-1
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Chapter 4: Business-Level Strategy LECTURE NOTES Chapter Introduction : Firms that perform well, even in very competitive industries, will follow some pattern of decision-making and execution that is internally consistent. That is, the firm will line up its resource commitments in a way that reinforces the direction of the enterprise. If these decisions are inconsistent, the outcome will be resource commitments that work against one another and hinder the progress of the business. This chapter will lay out the basic strategy patterns that can lead to competitive advantage. Knowing these will help students understand how to make the most of the firm’s potentials. OPENING CASEAcer Group: Using a “Bare Bones” Cost Structure to Succeed in Global PC Markets Acer Group used four PC brands as the foundation for its multi-brand global strategy – Acer, Gateway, Packard Bell, and eMachines. The company had 2008 revenues of $16.65 billion and its 2008 operating profit was up 38 percent from 2007. Data suggests that Acer was competing very successfully during the global recession. Looking at Acer’s business model, it is clear that they are following the cost leadership strategy. To reduce costs Acer has made a number of strategic decisions: to sell only through retail and other outlets (no direct sales); outsource all manufacturing and assembly operations; tight control of overhead costs (8 percent of sales vs. HP at 15 percent of sales and Dell at 14 percent of sales); and a focus on consumers and small/midsize businesses.
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This note was uploaded on 10/21/2011 for the course ACCOUNTING 101 taught by Professor Fenjimo during the Spring '11 term at College of Southern Idaho.

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CH04_INSTRUCTORMANUAL_HIH9E - Chapter 4: Business-Level...

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