Synergy among the industries or businesses chosen o

synergy among the industries or businesses
chosen.
o The direction and scope of an organization
over the long term, which achieves
advantage for the organization through its
configuration of resources within a
changing environment and to fulfill
stakeholders’ expectations (Johnson and
Scholes 2002)
o Corporate strategy defines the markets and
the businesses in which a company will
operate. Corporate strategy is typically
decided in the context of defining the
company’s mission and vision which are
statements of what the company does,
why it exists, and what it intends to
become.
 Competitive Strategy
o Competitive strategy is about being
different. It means deliberately choosing a

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different set of activities to deliver a unique
mix of value. (Michael Porter 1996)
o Competitive or business strategy defines
how the company will compete in a given
business. Competitive strategy hinges on a
company’s capabilities, strengths, and
weaknesses in relation to market
characteristics and the corresponding
capabilities, strengths, and weaknesses of
its competitors.
5. According to Porter, competition is driven by five basic
factors. Explain each.
 Threat of new entrants.
 Threat of substitute products or services.
 Bargaining power of suppliers.
 Bargaining power of buyers.
 Rivalry among existing firms.
1. Explain the concept of competitiveness of firms.
 Firm-level competitiveness is the ability of a firm to
get customers to choose its products or services
over competing alternatives on a sustainable basis.
2. Explain Porter’s three generic strategies.
 Low-Cost Leadership
o Achieving the lowest-cost position possible
in each and every operation of the firm
that can lead to low-price competitive
advantage
 Differentiation
o Achieving uniqueness of a product or
service that differentiates it from
competing alternatives in terms of higher
quality, sooner availability, better customer
service, better features, etc.
 Focus
o Achieving competitive advantage in a
narrow industry segment in terms of cost
advantage (cost focus) or differentiation
(differentiation focus)
3. Explain how firms could create competitive advantage?
 By placing greater or lesser emphasis (allocation of
resources, management time and attention) on
specific value chain activities than competitors.
 By managing linkages among activities better than
competitors do.
 By performing specific value-chain activities better
(better management, more highly trained people,
better equipment) or differently (using an
alternative technology) than competitors do
4. How is technological leadership different from
technological followership in terms of cost advantage and
differentiation?
 Cost Advantage
o Technological Leadership
 Pioneer the lowest-cost product
design
 Be the first firm down the learning
curve
 Create low-cost ways of performing
value activities
o Technological Followership
 Lower the cost of the products or
value activities by learning from
the leader’s experience
