LECTURE 4

Business level strategy: an integrated and coordinated set of commitments and

actions a firm uses to gain a competitive advantage by exploiting core
competencies in specific product markets.
Capability in doing competitive advantage needs to be valuable, rare, nonsubstitutable, very difficult/costly to imitate!
In selecting a business-level strategy, the firm determines:

WHO will be served (the customers)

o very well segmentation-> broad/focused?
o people have different agenda of what they want (looking for different
features, products, but in marketing we still need to focus on the
BENEFIT and VALUE).
WHAT customer needs to satisfy
o low cost with acceptable features or highly differentiated features
(have different benefits) with acceptable cost.
e.g: core product: in cars, u want with the high speed, which means u
are buying time.
o The key is understanding customers current and future needs!
HOW those needs will be satisfied
o How to leverage core competencies to implement value-creating
strategies?

FIVE BUSINESS-LEVEL STRATEGIES: lecture slide pg.6

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 competitiors.

Lowest competitive price

features acceptable to many customers
relatively standardized products
o example: Costco; warehouse style retailing

Cost saving activities required by cost leadership strategy!