CBL case 5, Esther Elschot, MSM3A
Problem Statement: What kind of business or corporate level strategy can Axel Springer implement to grow in 3-5 years Axel Springer AG have to implement a corporate level strategy to grow in 3 to 5 years. A business level strategy is not necessary because a low price or quality based strategy is not suitable, because in the industry that Axel Springer AG is operating in price or quality is not a factor to grow with. The only business level strategy that could be possible is the differentiation. To do something else than the competitors. For instance be the first on abandon the hard copy print. Convergence the print to new media. Or with the corporate level strategy to do a vertical integration. By entering a new market. That could be possible for Axel Springer. For instance focus on the music industry to grow. Because they are already a big company with a well known brand name so they should take advantage of that.
1. What are the business & corporate level strategies and what is the difference?(explain the different types of strategies) Business level strategies
Are strategies that are focussing on the customers. Business level strategies are to strengthen the business unit from a organization. It's about defining your business. You have to answer the following questions; What is to be satisfied? Who is to be satisfied? And how is it satisfied. So it's focusing on your customer groups, customer needs and distinctive competences. The first step in business level strategies is to identify the business unit of the organization. Looking at market based criteria and capabilities based criteria. (Johson&Scholes, 2008)
The second step is to look at the bases of the competitive advantage by looking at the strategy clock. (Jones&Hill, 2010)
If you are focusing on the the competitive advantages than you can formulate a competitive strategy. The different competitive strategies are: -No frills: combines the low price and low experienced added value -low-price: the lowest price of the competitors with the same value -differentiation: product or services that are unique compared to the competitors. -hybrid: is focusing on differentiation and the lowest price. -focused differentiation: combining a high experienced added value and doing a price premium. (Johson&Scholes, 2008)
Corporate level strategies
Are strategies that are focussing on the industry. By doing the value chain activities for a lower price and focusing on differentiation. It's about looking at other businesses and the value creation from these businesses. And how to enter and leave businesses and markets. You can focus on: market penetration, consolidation (organizations that are focusing defensively on their current markets and current products), product development,market development or diversification. (Jones&Hill, 2010) Corporate level strategies you can define in:
-horizontal integration: Is an single industry strategy. It's about working together with competitors in an industry to gain competitive advantages. -vertical integration: Is entering new industry to strengthen the business model. (Johson&Scholes, 2008) corporate relationships, outsourcing.
International strategies are strategies that are focussing on the drivers of the market, costs, government and competitors strategies. Market selection for international entry or expansion should be based on attractiveness, multidimensional measures of distance and expectations of the competitor. The four different strategies in international strategies are: -simple export
-global (Johson&Scholes, 2008)
Looking at the different strategies a company like the action has the no frills strategy. For the lowest price but same value is Media markt a good example. Differentiation is apple a good example with his macintosh 2,...
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