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BusinessLevelStrategy

Businesslevelstrategy
Anintegratedandcoordinatedsetofcommitments

andactionsthefirmusestogainacompetitive advantagebyexploitingcorecompetenciesinspecific productmarkets


Indicatesthechoicesthefirmhasmadeabouthowit

intendstocompeteinindividualproductmarkets

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thefoundationofsuccessful businesslevelstrategiesand shouldneverbetakenforgranted

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Selectingabusinesslevelstrategy

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Table5.1 BasisforCustomerSegmentation

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ThePurposeofaBusinessLevelStrategy

Createdifferencesbetween:
firmsposition itscompetitors

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Selectingabusinesslevelstrategy

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Figure5.2 FiveBusinessLevelStrategies

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Figure5.1 WestJetsActivitySystem

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CompetitiveRisks: CostLeadershipStrategy
Processesusedtoproducecouldbecomeobsoletebecause ofcompetitorsinnovations Innovationsmayallowrivalstoproduceatcostslowerthan thoseoftheoriginalcostleader Toomuchfocusoncostreductionsmayoccuratthe expenseoftryingtounderstandcustomersperceptionsof competitivelevelsofdifferentiation Imitation:usingtheirowncorecompetencies,competitors sometimeslearnhowtosuccessfullyimitatethecost leadersstrategy
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CompetitiveRisks: DifferentiationStrategy
customersmightdecidethepricedifferentialbetweenthe differentiatorsproductandcostleadersistoolarge
firmsmeansofdifferentiationmayceasetoprovidevaluefor

whichcustomersarewillingtopay
experiencecannarrowcustomersperceptionsofthevalueof

aproductsdifferentiatedfeatures
Counterfeiting:Fakescandamagethereputationofthe

company,nottomentionharmthecustomers
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CompetitiveRisks: FocusStrategies
competitormaybeabletofocusonamorenarrowly definedcompetitivesegmentandoutfocusthefocuser
acompanycompetingonanindustrywidebasismay

decidethatthemarketsegmentservedbythefocus strategyfirmisattractiveandworthyofcompetitive pursuit


theneedsofcustomerswithinanarrowcompetitive

segmentmaybecomemoresimilartothoseofindustry widecustomersasawhole
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CompetitiveRisks:
IntegratedCostLeadership/DifferentiationStrategy
Difficultforfirmstoperformprimaryandsupport activitiesinwaysthatallowthemtoproducerelatively inexpensiveproductswithlevelsofdifferentiationthat createvalueforthetargetcustomer Resultisbecomingstuckinthemiddle

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