specific‚ individual product or service markets. Business-level strategy is concerned with a firm’s position in an industry‚ relative to competitors. These 3 decisions are the basis for choosing business level strategies: 1. customer needs‚ or what is being satisfied; 2. customer groups‚ or who is being satisfied; 3. Distinctive competencies or how customer needs are satisfied. Formulating the Business Model: Customer Needs and Product Differentiation Customer Needs: Desires
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for Target Customers Topic Outline • Market Segmentation • Market Targeting • Differentiation and Positioning Copyright © 2010 Pearson Education‚ Inc. Publishing as Prentice Hall Chapter 7- slide 2 Market Segmentation Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs Copyright © 2010 Pearson Education
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basic drivers of product differentiation are attributes‚ position‚ pricing methods‚ and information. These drivers are what encourage customers to purchase one brand over another. Being “different” is beneficial if the customer feels they are getting a “better bang for their buck”. That is‚ if the customer prefers the company’s product relative to competitors. The brands attributes are what distinguishes the brand from other brands. Attributes for a manufacturer can be product quality‚ design‚
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a. Cost leadership b. Response c. Differentiation Cost leadership strategy Cost leadership’s purpose is becoming and remain the least cost producer or distributor in the industry. This company aimed at reduction of input costs and minimizing the operation expenses. This type of least cost producer gain advantage by getting its costs of production lower than other producer in the market. For an example; Kawanku Roti Parata (Malaysian cuisine product). This product have multi choice of food to the
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Strategic Elements of Competitive Advantage IKEA ü IKEA confront competitors such as supermarkets (Wal-Mart) and other furniture co. ü they focused on 3 areas for improvement: product assortment‚ customer service and product availability. ü Prices are affordable to almost everyone; ü colors blue and yellow are Sweden national colors; ü customers see the furniture in showrooms and with names instead of model numbers; ü shopping is a self-service activity –browse‚ u write
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eliminating or curbing non-essential cost-producing activities and performing essential value chain activities more cost-effectively that rivals. 4. A differentiation-based competitive advantage E. often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer’s overall costs of using the company’s product or (3) enhance buyer satisfaction in intangible or non-economic ways or (4) deliver value to customers by exploiting competitive capabilities that rivals
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How is the industry structure changing? For the better or the worst? Changes in Industry structure in 1979 Some changes are as follow: The Rivalry between competitors was gradually focusing on price because of continually reducing product differentiation. Companies like Makita are leading the pricing based rivalry to gain a quick market share (sometimes 20% to 30% below market price). This might impact the already low industry profitability badly if other companies follow suit and start pricing
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attractive segment 2) It is most accurate to say that successful niche marketing relies on a firm’s ________ and its ________. a-marketing strategy; services b- individual relationships with customers; positioning c- superior products; value network partners d- greater knowledge of customers’ needs; special reputation e- competitive advantage in comparison to mass-market companies; affordable pricing 3) Today‚ the low cost of setting up shop ________ makes
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1 Explain‚ in details‚ the strategy adopted by IKEA‚ and how it successfully did the positioning. *** At business level strategy Focus Strategies By implementing a cost leadership or differentiation strategy‚ IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope. Alternatively‚ IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry
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Individual report on Victoria’s Secret 1.0 Introduction The purpose of this report is to analyse the external environment of Victoria’s Secret through the Porters Five Forces analysis and then analyse the strategy of differentiation and strategic alliances used by the leading American lingerie retailer and to evaluate if these strategies are implemented and used effectively by the company. 2.0 Analysis of the Internal Strategic Capabilities and External Environment A leading retailer such as
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