LESSON 4: Strategy Formulation and Business-Level Strategic Action

Question 1

is the concentration of an organization on specific strategic directions to achieve a competitive advantage.

Answer 1

srategy focus

Question 2

Foundation of strategic intent

Answer 2

Vision and Mission Statements

Question 2

The process of determining and understanding the specific groups or segments of the market that the business intends to serve.

Answer 2

Identification of Customers

Question 3

Key Elements of Strategy Focus and Development

Answer 3

 Vision and Mission Statements
 Strategic Objectives
 Environmental Scanning
 Strategic Analysis Tools

Question 4

Strategic Analysis Tools:

Answer 4

SWOT Analysis, Porter’s Five Forces, Value Chain Analysis.

Question 5

Steps in Customer Identification:

Answer 5

 Market Segmentation
 Target Market Selection
 Customer Profiling
 Needs Analysis

Question 5

Strategic Objectives:

Answer 5

Short-term and long-term goals

Question 6

Strategy Formulation Process:

Answer 6

1. Define mission and vision
2. Conduct internal and external assessments
3. Set strategic objectives
4. Formulate strategies
5. Implement and monitor

Question 6

Environmental Scanning:

Answer 6

External (PESTEL, Industry Analysis) and Internal (Resources, Capabilities)

Question 7

: Choosing the most appropriate segments.

Answer 7

Target Market Selection

Question 7

Demographics, psychographics, behavioral, and geographic criteria.

Answer 7

Market Segmentation

Question 8

Automates sales, marketing, and service processes.

Answer 8

Operational CRM

Question 8

Understanding customer pain points and preferences.

Answer 8

Needs Analysis

Question 8

: Creating customer personas.

Answer 8

Customer Profiling

Question 8

A strategy for managing a company’s relationships and interactions with current and
potential customers using data analysis and digital tools.

Answer 8

Customer Relationship Management (CRM)

Question 8

Components of CRM:

Answer 8

 Operational CRM
 Analytical CRM
 Collaborative CRM

Question 9

Importance of customer identification

Answer 9

 Enhances customer satisfaction
 Increases marketing efficiency
 Drives product/service innovation

Question 9

Analyzes customer data for decision-making.

Answer 9

Analytical CRM

Question 10

Facilitates communication across departments and with customers.

Answer 10

Collaborative CRM

Question 11

Benefits of CRM:

Answer 11

 Customer retention and loyalty
 Personalized marketing
 Improved customer service
 Increased profitability

Question 12

are approaches taken by a firm to gain a competitive advantage in a particular market or industry.

Answer 12

Business-level strategies

Question 12

Gaining an edge by being the lowest-cost producer.

Answer 12

Cost Leadership

Question 13

Main Types of business level strategy

Answer 13

 Cost Leadership
 Differentiation
 Focused Cost Leadership
 Focused Differentiation
 Integrated Strategy

Question 14

Offering unique features that customers value.

Answer 14

Differentiation

Question 15

Targeting a narrow market segment at a low cost.

Answer 15

Focused Cost Leadership:

Question 16

Types of Strategy

Answer 16

- Corporate-Level Strategies - Business-Level Strategies - Functional-Level Strategies

Question 16

Offering specialized products to a niche market.

Answer 16

Focused Differentiation

Question 17

Combining cost efficiency with differentiation.

Answer 17

Integrated Strategy

Question 18

 Focus on overall scope and direction.

Answer 18

Corporate-Level Strategies

Question 19

Corporate-Level Strategies example

Answer 19

Diversification into new industries.

Question 20

Specific actions in departments like marketing, production, and finance.

Answer 20

Functional-Level Strategies

Question 20

Business-Level Strategies examples

Answer 20

Apple using differentiation via product design and innovation.

Question 20

how the firm competes in individual markets (e.g., cost leadership, differentiation).

Answer 20

Business-Level Strategies

Question 21

Functional-Level Strategies examples

Answer 21

Marketing launching a digital ad campaign to support new product lines

Question 21

Cost Leadership market scope

Answer 21

Broad

Question 21

These strategies are universally applicable in various industries and help businesses position themselves effectively in the market.

Answer 21

Universal Business-Level Strategies

Question 22

Cost Leadership competitive advantage

Answer 22

Lowest operational cost

Question 22

Cost Leadership example

Answer 22

Walmart

Question 23

Differentiation example

Answer 23

Apple

Question 23

Differentiation market scope

Answer 23

Broad

Question 24

Differentiation competitive advantage

Answer 24

Unique product features

Question 25

Focused Cost Leadership competitive advantage

Answer 25

Lowest cost in niche

Question 25

Focused Cost Leadership market scope

Answer 25

Narrow

Question 26

Focused Differentiation market scope

Answer 26

Narrow

Question 27

Focused Cost Leadership example

Answer 27

Dollar General

Question 28

Focused Differentiation competitive advantage

Answer 28

Unique features for niche

Question 29

Focused Differentiation example

Answer 29

Rolex

Question 30

Integrated market scope

Answer 30

Broad/Narrow

Question 31

Integrated competitive advantage

Answer 31

Balance of cost and uniqueness

Question 32

Integrated example

Answer 32

IKEA

Question 33

The Risk Associated with Cost Leadership Strategy

Answer 33

 Technological Disruption  Price Wars  Perception of Low Quality  Imitation by Competitors

Question 34

Competitors adopting new cost-saving technologies.

Answer 34

Technological Disruption

Question 35

Aggressive pricing may erode profit margins. .

Answer 35

Price Wars

Question 36

: Customers may view low cost as poor quality.

Answer 36

Perception of Low Quality

Question 37

Diminishes the uniqueness of cost advantage

Answer 37

Imitation by Competitors

Question 38

: A strategy where firms seek to offer products or services that are perceived as unique in the industry

Answer 38

Product Differentiation Strategy

Question 39

Differentiation Bases:

Answer 39

 Product design and features  Brand image  Customer service  Innovation

Question 40

Advantages of Product Differentiation Strategy

Answer 40

 Brand loyalty  Less price sensitivity  Higher profit margins

Question 41

Risk Involved in Differentiation Strategy

Answer 41

 High Costs  Imitation  Changing Customer Preferences

Question 42

: Developing and maintaining uniqueness can be expensive.

Answer 42

High Costs

Question 43

Competitors may copy features.

Answer 43

Imitation

Question 44

: What is unique today may become outdated.

Answer 44

Changing Customer Preferences

Question 45

: Can alienate some market segments.

Answer 45

Over-Differentiation

Question 46

A strategy targeting a specific, well-defined market segment with customized offerings.

Answer 46

Segmented Focus Strategy

Question 47

Segmented Focus Strategy Examples:

Answer 47

 Organic food brands targeting health-conscious consumers  Luxury brands targeting affluent buyers

Question 48

Segmented Focus Strategy Benefits:

Answer 48

 Strong brand loyalty in niche markets  Limited competition

Question 49

Segmented Focus Strategy Risks:

Answer 49

 Market segment may shrink  Larger firms may target the same niche

Question 50

A hybrid strategy combining low cost with product differentiation to achieve competitive advantage.

Answer 50

Integrated Cost Leadership and Differentiation Strategy

Question 51

Integrated Cost Leadership and Differentiation Strategy Implementation Requirements:

Answer 51

 Flexible manufacturing  Efficient value chain  Strong organizational culture

Question 52

Integrated Cost Leadership and Differentiation Strategy Advantages:

Answer 52

 Broader market appeal  Cost efficiency with added value

Question 53

: Strategic connections between firms and their stakeholders (e.g., suppliers, partners, customers) supported by robust information systems.

Answer 53

Network Linkages and Information Systems

Question 53

Integrated Cost Leadership and Differentiation Strategy Risks:

Answer 53

 Confusion in value proposition  Operational complexity  Risk of being “stuck in the middle”

Question 54

Types of Network Linkages

Answer 54

 Vertical (with suppliers and distributors)  Horizontal (with competitors, alliances)

Question 55

Role of Information Systems:

Answer 55

 Data collection and analytics  Supply chain coordination  Real-time decision-making

Question 56

Benefits of Network Linkages and Information Systems

Answer 56

 Improved operational efficiency  Enhanced innovation and collaboration  Faster response to market changes

Question 57

refers to the structured process of creating strategies that align with the company’s vision and external/internal environment.

Answer 57

Strategic development