MAN 4720 - Chapter 4 - Business Level Strategy

The attempt to negate a firm's resource advantage by directly imitating the resource in question ____________ or through working around it to provide a comparable product or service _____________.

(direct imitation) (substitution)

The resource-based model views resources as: - The critical assumption to resource immobility - The intangible asset - The main driver of firm performance - Threats to competitors

- The main driver of firm performance

By definition, resource immobility suggest that resources are ______ to move from firm to firm - impossible - difficult - readily available - easy

- difficult

What should a firm do in order to be organized to capture value? - have a rare and valuable resource - have CEOs with forward-thinking vision - have a good org structure - have good coordinating systems

- have a good org structure - have good coordinating systems

A resource is valuable when (check all): - it is both heterogeneous and immobile - it helps a firm exploit and external opportunity or offset an external threat - it produces tangible, but not intangible competencies - it helps the firm increase its economic value creation

- it helps a firm exploit and external opportunity or offset an external threat - it helps the firm increase its economic value creation

Focus strategies

-Focus cost leadership -Differentiation strategy

Factors that drive Focused Strategies

-Large Firms may overlook small niches. -

Key issues in the business level strategy

-Who will be served -what needs to be satisfied -how will those needs be satisfied

____________ are distinct and fine-grained business processes such as order taking, the physical delivery of products, or invoicing customers. Each distinct activity enables firms to add incremental value by transforming inputs into goods and services. - Resources - Capabilities - Activities - Core competencies

Activities

Focus strategies

An integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment. -Particular buyer group-youths or senior citizens -Different segment of a product line- professional craftsmen versus do-it-yourselfers. -Different geographic markets - east coast versus west coast.

Competencies that give competitive advantage

Better expectation of the future resource value, path dependence, casual ambiguity, social complexity, and IP protection.

___________ are organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically. - Capabilities - Core competencies - Activities - Resources

Capabilities

Implement a Focus Strategy To be able to implement a focus strategy firms must-

Complete various primary and support activities in a competitively superior manner, in order to develop and sustain a competitive advantage and earn above average returns.

Focused differentiation

Concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members example: Ferrari focus on people who want speed and Power

A _____________ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage - Capability - Core competencies - Resource - Activity

Core competency

_____________ describe a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage. - Planned emergence - Strategic misfits - Changing values - Dynamic capabilities

Dynamic capabilities

The firm's internal activities to transform inputs into outputs consist of ________ activities, which add value directly, and ____________ activities, which add value indirectly

Primary; support

Business Level Strategy

Providing value to customers and gaining competitive advantage by exploiting core competencies in individual product markets.

Support activities

R&D, Info Systems, HR, Accounting/Finance, and firm infrastructure including processes, policies, and procedure.

According to the ______________ ____________ views, firms are a distinctive collection of resources, capabilities, and competencies.

Resource based

We synthesize insights from an internal analysis of the company's strengths and weaknesses with those from an analysis of external opportunities and threats using the __________ analysis

SWOT

Primary activities are?

Supply chain management, operations, distribution, marketing/sales, and after-sales service

competitive scope broad scope

The Firm competes in many customer segments any age any background example:Hilton serves babies to old people.

competitive scope narrow scope

The Firm selects a segment or group of segments in the industry and tailor's it's strategy to serving them at the exclusion of others. example nursing homes only service senior citizens. it is a niche.

In order for a firm to gain a temporary competitive advantage, a resource must be at least both ___________ & __________.

Valuable and rare

cost leadership

broad Market 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 a broad audience - product characteristics **** relatively standardized commoditized products ****features broadly acceptable too many customers **** lowest competitive price affordable, average, acceptable quality

Differentiation strategy

broad Market developing a product or service that has unique characteristics valued by customers. Makes them feel special it's unique in the eyes of the customer because using the product makes you feel special. Example: Timex vs. Rolex Timex would be a cost leadership strategy whereas Rolex is a differentiation strategy

Focus cost leadership

cheap price, not marketed to everyone only certain people. The Firm tries to focus on competition in either cost or differentiation features in that specific market segment. Ikea is an example Market of the newlyweds college students

5 Business level strategies

cost leadership differentiation Focus cost leadership Focus differentiation integrated cost leadership differentiation

integrated cost leadership differentiation

strive to provide customers with relatively low cost product that also have value differentiated features example Southwest unique and cheap

Business level strategies used to position itself by

the firm must decide whether it intends to -perform activities differently or -perform different activities as compared to its rivals.

Business level strategies are intended

to create differences between the firm's competitive position and those of its competitors.