FHSU MGT 499 Busines Policy Chapter 4 Strategic Management Competitiveness and Globalization 9e

Business-Level Strategy
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.
Process to form Business-Level Strategy
Core Competencies – Strategy – Business-Level strategy
Key Issues in Business-Level Strategy
-Who will be served?
-What needs will be satisfied?
-How will those needs be satisfied?
Market Segmentation
a process used to cluster people with similar needs into individual and identifiable groups
Two main market segments:
Consumer Markets & Industrial Markets
Firms must continuously improve, innovate, and upgrade their competencies in order to…
meet and exceed customer expectations across time
Business Level Strategies are intended to…
create differences between the firms position relative to those of its rivals
Business Level Strategies can do to things to position the firm…
Perform activities differently, or perform different activities as compared to its rivals
Types of Competitive Advantage
Cost leadership, Product Differentiation, Focused Cost, Focused Differentiation, Integrated cost leadership/differentiation
Broad Scope
The firm competes in many customer segments
Narrow Scope
The firm selects a segment or group of segments in the industry and tailors its strategy to serving them at the exclusion of others.
Cost Leadership Strategy
An integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost/ relative to that of competitors with features that are acceptable to customers
Cost Leadership Characteristics
-Relatively Standardized products
– Features acceptable to many customers
-Lowest competitive price
Differentiation Strategy
an integrated set of actions taken to produce goods or services that customers perceive as being different in ways that are important to them
Focus Strategy
an integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment
Integrated Cost leadership/differentiation strategy
involves engaging in primary and support activities that allow a firm to simultaneously pursue low cost and differentiation
Total quality Management
a managerial innovation that emphasizes an organization’s total commitment to the customer and to continuous improvement of every process through the use of data-driven, problem-solving approaches based on empowerment of employee groups and teams.
Each business level strategy is refined by:
Porter’s 5 forces