Summary of Business-Level Strategy
Management Chapter 6
Structure:
Levels of strategy:
Superior performance
Competitive advantages
Corporate strategy---what business/industry
Business strategy—how to compete
Functional strategy---execute to support
Business strategic goals by @ all department
1. Superior performance: the ability to generate high profitability and increase profits over time
High profitability
Superior performance
Requires eg. Specific strategy, Technology, capabilities etc
Growth in profits over time
2. Competitive advantage: Advantage obtained when a firm outperforms its rivals with a specific strength Distinctive competency: A set of unique strength which is key to the company’s competitiveness (apple’s innovation strength, Li& Fung’s One-stop shop model). It is the mother or host of related competitive advantages. A unique strength that rivals lack. (E.g. Dell’s fast order fulfillment system, Toyota’s JIT, Starbuck’s shop atmosphere) Sustainable advantage: A distinctive competency that rivals cannot easily match or imitate Depends on: Value-does it enable a company to exploit a business opportunity (e.g. user friendly iphone) Imitability- how costly to copy it (-Barrier to imitation: Factors that make it difficult for a firm to imitate the competitive position of a rival - Legacy constraints: Prior investments in a particular way of doing business that are difficult to change and limit a firm’s ability to imitate a successful rival Substitutability- how likely it will be substituted by another product Organization- does the company’s infrastructure (policies, systems and culture) support the maintenance of the advantage 3. Business-level Strategy: Strategy concerned with deciding how a firm should compete in the industries in which it has elected to participate A. Competitive theme: differentiation or low cost 1) Low-cost strategy: Focusing managerial energy and attention on doing everything
Structure:
Levels of strategy:
Superior performance
Competitive advantages
Corporate strategy---what business/industry
Business strategy—how to compete
Functional strategy---execute to support
Business strategic goals by @ all department
1. Superior performance: the ability to generate high profitability and increase profits over time
High profitability
Superior performance
Requires eg. Specific strategy, Technology, capabilities etc
Growth in profits over time
2. Competitive advantage: Advantage obtained when a firm outperforms its rivals with a specific strength Distinctive competency: A set of unique strength which is key to the company’s competitiveness (apple’s innovation strength, Li& Fung’s One-stop shop model). It is the mother or host of related competitive advantages. A unique strength that rivals lack. (E.g. Dell’s fast order fulfillment system, Toyota’s JIT, Starbuck’s shop atmosphere) Sustainable advantage: A distinctive competency that rivals cannot easily match or imitate Depends on: Value-does it enable a company to exploit a business opportunity (e.g. user friendly iphone) Imitability- how costly to copy it (-Barrier to imitation: Factors that make it difficult for a firm to imitate the competitive position of a rival - Legacy constraints: Prior investments in a particular way of doing business that are difficult to change and limit a firm’s ability to imitate a successful rival Substitutability- how likely it will be substituted by another product Organization- does the company’s infrastructure (policies, systems and culture) support the maintenance of the advantage 3. Business-level Strategy: Strategy concerned with deciding how a firm should compete in the industries in which it has elected to participate A. Competitive theme: differentiation or low cost 1) Low-cost strategy: Focusing managerial energy and attention on doing everything