4. Business Level Strategy

Question 1

Business Level Strat

Answer 1

An integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets

Commitments and actions to gain competitive advantage

Question 2

3 questions of BL Strat

Answer 2

Who will be served
- Market Segmentation
What needs do those target customers have that the firm will satisfy?
- Determining which customers needs to satisfy
How will those needs be satisfied by the firm
- Core Comp. necessary to to satisfy customer needs

Question 3

2 key decisions in Porters Generic Strategies

Answer 3

1. Deliberate choice - Perform activities differently (cost) or perform different activities (uniqueness)
2. Determine Competitive scope: Broad or Narrow

Question 4

5 types of BLS

Answer 4

Cost leadership
Focussed Cost leadership
Differentiation
Focussed Differentiation
Integrated Cost leadership/Differentiation

Question 5

Cost leadership Strat

Answer 5

Services/Goods with features acceptable to customers at the lowest cost and highest margins relative to competitors.
No frill- standardized
- economies of scale

Question 6

Cost Leadership Risks

Answer 6

• Source of advantage becomes obsolete
• Focus on cost may cause the firm to overlook important customer preferences
• Imitiation

Question 7

Broad Differentiation

Answer 7

G/S at acceptable cost but at a perceived value

Question 8

Broad Differentiation Risks

Answer 8

• Perceived cost differentiation too great
• The means of differentiation may cease to provide value for which customers are willing to pay
• Experience can narrow customers perceptions of the value of a products features

Question 9

Focus Strategy

Answer 9

Focus on a particular segment or niche.
- may lack resources to compete in broader market
- May be able to serve more effectively a narrow market
- Large firms may overlook small niches/specific needs

Question 10

Risks to Focussed Strategies (Cost or Differentiation)

Answer 10

• Competitor may be able to out focus you
• Customers needs may become similar to industry-wide customers
• Industry wide company may find attractive

Question 11

Integrated Cost leadership/Differentiation

Answer 11

Efficiently produce products with differentiated attributes
Simultaneousy concentrate on two sources of Comp Adv.
Must be competent in many of the Primary and support activities

Question 12

Risks to Integrated Cost leadership/Differentiation

Answer 12

Cost structure not low enough and not sufficiently differentiated

Question 13

Blue Ocean Strat

Answer 13

• Uncontested Market
• Make comp irrelevant
• Create and capture new demand
• Break the value/cost tradeoff