carpenter_ppt_ch05_ed2

carpenter_ppt_ch05_ed2 - Chapter Five Crafting Business...

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1 Chapter Five Crafting Business Strategy
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2 OBJECTIVES Define generic strategies and show how they relate to a firm’s strategic position 1 Describe the drivers of low-cost, differentiation, and focus strategic positions 2 Identify and explain the risks associated with each generic strategy position 3 Show how different positions fit with various stages of the industry life cycle 4 Evaluate the quality of the firm’s strategy 5
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3 JUDO STRATEGY “At its heart, judo strategy is about developing a deep understanding of your competition and the moves that will turn your competitors’ strength to your advantage.” – David Yoffie and Mary Kwak From Judo Strategy
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4 THE RACE TO THE FUTURE IS ON Companies can be classified as: Drivers Passengers Road Kill Which will get to the future first?
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5 STRATEGIC POSITIONING SHOULD IMPROVE PROFITABILITY Where managers of a company situate that company relative to it’s rivals along important competitive dimensions Definition Purpose To reduce the effects of rivalry and thereby improve profitability
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6 No advantage over rivals Advantage over rivals Low-cost Differentiation Description Produce an essentially equivalent product at a lower cost Produce a differentiated product and charge suffici- ently higher prices to more than off-set the added costs of differentiation A FIRM CAN GAIN ADVANTAGE OVER RIVALS IN TWO WAYS
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7 Adapted from poster, M.1980. Competitive strategy , 1980. Low-cost Differentiation Strategic advantage Strategic target Narrow (i.e., particular segment only) Broad (i.e., industry wide) Broad differentiation Focused cost leadership Focused differentiation Broad low-cost leadership THE STRATEGIC POSITIONING MODEL
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8 LOW-COST LEADERSHIP AND DIFFERENTIATION OFFER GREATER MARKET SHARE AND/OR PROFITS Examples Benefits Low-cost leadership Differentiation Pacific Cycle Gallo Wines Wal-Mart Southwest Airlines Home Depot Trek Bicycles Coca-Cola and Pepsi Mercedez Benz Honda, Yamaha, and Suzuki motorcycles Stouffers (frozen foods) Capture market share by offering lower-price or Earn higher by maintaining price parity Capture market share by offering higher quality at same price or Earn higher margins by raising prices over competitors
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Low-cost Differentiation Strategic advantage Strategic target Narrow Broad Trek Bicycles Coca-cola
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This note was uploaded on 01/11/2012 for the course BUS 202 taught by Professor Howser during the Spring '11 term at NYU.

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carpenter_ppt_ch05_ed2 - Chapter Five Crafting Business...

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