Assignment 1

Summary Chapter 6
Business-Level Strategy: How to Compete for Advantage
What is business level strategies?
Goal directed actions managers take
How to gain and sustain competitive advantage
Strategic position
Profile based value chain creation and cost
A valuable and unique position
Strategic Trade-Offs
Choices between a cost or value position
Purpose of tradeoffs are to maximize the firm’s
Generic Business Strategies
Differentiation
Cost leadership
Focused Business Strategies
Focused differentiation
Focused Cost leadership
Blue Ocean strategy
Successfully combining differentiation and cost-leadership activities
Uses value innovation to reconcile trade-offs
The metaphor of blue ocean means:
a. Untapped market space
b. The creation of additional demand
c. The opportunity for highly profitable growth
Differentiation Strategy: Understanding Value Drivers
Differentiation Strategy
Unique features that increase value of goods and services
Consumers are willing to pay a higher price.
● The focus of competition:
Unique product features
Service
New product launches
Marketing and promotion
● Competitive advantage achieved when:
Value – Cost > competitors
Cost Leadership Strategy
● Goal:
Reduce the firm’s cost below its competitors
Offer adequate value
● Resources are focused on:
Reducing cost
a. To manufacture a product
b. To offer a service
● Reducing prices for customers
● Optimizing the value chain to achieve low-cost