05 BUS 444 Chap 5

05 BUS 444 Chap 5 - Business-Level Strategy Creating and...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Business-Level Strategy: Creating and Sustaining Competitive Advantages Chapter Five In this chapter, pay close attention to the Strategy Spotlights and Exhibits . You will need to understand these for your case study.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Learning Objectives After reading this chapter, you should have a good understanding of: LO1 The central role of competitive advantage in the study of strategic management. LO2 The three generic strategies: overall cost leadership, differentiation, and focus. LO3 How the successful attainment of generic strategies can improve a firm’s relative power vis-à-vis the five forces that determine an industry’s average profitability. LO4 The pitfalls managers must avoid in striving to attain generic strategies. 5-2
Background image of page 2
Learning Objectives (cont.) LO5 How firms can effectively combine the generic strategies of overall cost leadership and differentiation. LO6 How Internet-enabled business models are being used to improve strategic positioning. LO7 The importance of considering the industry life cycle to determine a firm’s business-level strategy and its relative emphasis on functional area strategies and value- creating activities. LO8 The need for turnaround strategies that enable a firm to reposition its competitive position in an industry. 5-3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Three Generic Strategies
Background image of page 4
Three Generic Strategies 1. Overall cost leadership Low-cost-position relative to a firm’s peers Manage relationships throughout the entire value chain 2. Differentiation Create products and/or services that are unique and valued Non-price attributes for which customers will pay a premium 5-5
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Three Generic Strategies 3. Focus strategy Narrow product lines, buyer segments, or targeted geographic markets Attain advantages either through differentiation or cost leadership 5-6
Background image of page 6
Example Companies pursuing an overall cost leadership strategy McDonalds Wal-Mart Companies pursuing a differentiation strategy Harley Davison Apple Companies pursuing a focus strategy Rolex Lamborghini 5-7
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Competitive Advantage and Business Performance
Background image of page 8
Overall Cost Leadership Tight set of interrelated tactics that includes: Tight cost and overhead control Avoidance of marginal customer accounts Cost minimization in all activities in the firm’s value chain 5-9
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Overall Cost Leadership Experience curve refers to how business “learns” to lower costs as it gains experience with production processes with experience, unit costs of production decline as output increases in most industries 5-10
Background image of page 10
Overall Cost Leadership (Cont.)
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 45

05 BUS 444 Chap 5 - Business-Level Strategy Creating and...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online