Lecture 4_Firm-level Strategies_Post

Lecture 4_Firm-level Strategies_Post - Firm-Level Generic...

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Firm-Level Generic Strategies
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The Source of Capabilities Teams of Resources The Foundation of Gained through Core Competencies Sustained Competitive Advantage Components of Internal Analysis The Pathway to Above- Average Returns Strategic Competitiveness Resources * Tangible * Intangible Sources of Competitive Advantage Core Competencies The Source of
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Resource-Based View V aluable: Can the firm use the resource to exploit opportunity or to neutralize a threat? R are: Is resource accessible to many firms or only a few? I nimitable: Can others imitate it costlessly or easily? O rganization: Can the organization support the exploitation of this resource?
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Strategic Advantage Uniqueness Perceived by the Customer Low Cost Position Industrywide Strategic Target DIFFERENTIATION OVERALL COST LEADERSHIP FOCUS Particular Segment Only Target and Advantage of Porter’s Generic Strategies Source: Porter (1980)
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Value Chains for Cost Advantage and Differentiation Advantage Firm A: Firm B: Firm C: Firm B: Price Price Price Total cost to buyer Firm A has a cost advantage Firm C has a differentiation advantage Producer’s cost Producer’s margin
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Cost Leadership Strategy Deliver a GOOD product or service at the lowest possible cost Open a significant and sustainable cost gap over all competitors Create advantage through superior management of key cost drivers Translates into above-average profits with industry- average prices Cost leaders must maintain parity or proximity in satisfying buyer needs Cost leadership often requires trade-offs with differentiation BUT
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This note was uploaded on 03/07/2012 for the course BUS 375 taught by Professor Siri during the Spring '12 term at University of Illinois, Urbana Champaign.

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Lecture 4_Firm-level Strategies_Post - Firm-Level Generic...

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