1. BUSINESS LEVEL STRATEGY ANALYSIS
The Positioning Approach.
Porter’s 5 Forces.
Value Chain Analysis.
The Generic Strategies.

2. The Positioning Approach
The oldest approach to military strategy.
The newest of the three prescriptive approaches to strategy .
Design and Planning Approaches were explained in Chapter 3.
Focuses on how firms in a given context differ in product market positions compared to the competition. 80

3. Premises of The Positioning Approach
Strategy follows structure.
Looks at the groups of competitors in an industry.
Relies more heavily on calculation than the design or planning schools.
Places even more emphasis on the role of strategic planners. 81

4. Porter’s Five Forces Analysis
Breaking Apart Industry-Level Competition 87

5. Porter’s Five Forces Analysis
Threat of
Entry

6. The 6 Barriers of Entry Economies of Scale. Product Differentiation.
Capital Requirements.
Cost Disadvantages Independent of Size.
Access to Distribution Channels.
Government Policy. 89

7. Porter’s Five Forces Analysis
Power of
Buyers

8. Buyer Power Determinants
Bargaining Leverage.
Buyer Concentration
Buyer Volume.
Buyer Switching Costs.
Buyer Information.
Ability to Integrate Backward.
Substitute Products.
Pull-Through. 90

9. Buyer Power Determinants
Price Sensitivity.
Price/Total Purchases
Product Differences.
Brand Identity.
Impact on Quality/Performance.
Buyer Profits.
Decision-Maker’s Incentives. 90

10. Porter’s Five Forces Analysis
Power of
Suppliers

11. Supplier Power Determinants
Differentiation of Inputs.
Switching Costs of Suppliers.
Presence of Substitute Products.
Supplier Concentration.
Importance of Volume to Supplier.
Cost Relative to Total Purchases in the Industry.
Impact of Inputs on Cost or Differentiation. 90

12. Porter’s Five Forces Analysis
Power of
Substitutes

13. Relative Price Performance of Substitute. Switching Costs.
Power of Substitutes
Relative Price Performance of Substitute.
Switching Costs.
Buyer Propensity to Substitute. 92

14. Porter’s Five Forces Analysis
Competitive
Rivalry

15. Determinants of Rivalry
Industry Growth.
Fixed Costs/Value Added.
Intermittent Overcapacity.
Product Differences.
Brand Identity.
Switching Costs.
Concentration and Balance.
Informational Complexity.
Diversity of Competitors.
Corporate Stakes.
Exit Barriers. 92

16. Determinants of Rivalry
Competition is Everything!!!
Industry Growth.
Fixed Costs/Value Added.
Intermittent Overcapacity.
Product Differences.
Brand Identity.
Switching Costs.
Concentration and Balance.
Informational Complexity.
Diversity of Competitors.
Corporate Stakes.
Exit Barriers.

17. Value Chain Analysis
Figure 3 98

18. Value Chain Analysis Primary Activities Margin Inbound Logistics
Outbound
Logistics
Marketing
& Sales
Service
Operations
Margin
Primary Activities
Figure 3

19. Value Chain Analysis Primary Activities Procurement
Human Resource Management
Margin
Technology Development
Procurement
Inbound
Logistics
Outbound
Logistics
Marketing
& Sales
Service
Operations
Margin
Primary Activities
Figure 3

20. Value Chain Analysis developing a distinctive competence.
Importance of value-chain analysis is that it provides a framework for identifying or
developing a distinctive competence. 82

21. Devising a Plan of Action
Position the Company.
Influence the Balance of the Forces.
Anticipate Shifts in the Forces. 93

22. Creating Families of Strategies
. Locating the core business.
. Distinguishing the core business.
. Elaborating the core business.
. Extending the core business.
. Reconceiving the core business. 94

23. The Core Business is reflected in the Choice of Generic Strategies
Creating Families of Strategies
. Locating the core business.
. Distinguishing the core business.
. Elaborating the core business.
. Extending the core business.
. Reconceiving the core business.
The Core Business is reflected in the
Choice of Generic Strategies

24. Porter’s Generic Strategies
Cost Advantage
Lower Cost
Differentiation
Broad
Target
1. Cost Leadership
Competitive
Scope
Narrow
Target 99
Figure 4

25. Porter’s Generic Strategies
Cost Advantage
Lower Cost
Differentiation
Broad
Target
1. Cost Leadership
2. Differentiation
Competitive
Scope
Narrow
Target
Figure 4

26. Porter’s Generic Strategies
Cost Advantage
Lower Cost
Differentiation
Broad
Target
1. Cost Leadership
2. Differentiation
Competitive
Scope
Narrow
Target
3A. Cost Focus
Figure 4

27. Porter’s Generic Strategies
Cost Advantage
Lower Cost
Differentiation
Broad
Target
1. Cost Leadership
2. Differentiation
Competitive
Scope
3B. Differentiation
Focus
Narrow
Target
3A. Cost Focus
Figure 4

28. Strategies of Differentiation
Price Differentiation.
Image Differentiation.
Support Differentiation.
Quality Differentiation.
Design Differentiation.
Undifferentiation. 99

29. Strategies of Scope Unsegmentation. Segmentation. Niche. Customizing.
100

30. Elaborating the Core Business
Penetration Strategies.
Market Development Strategies.
Geographic Expansion Strategies.
Product Development Strategies.
101

31. Elaborating the Core Business
Penetration Strategies.
Market Development Strategies.
Geographic Expansion Strategies.
Product Development Strategies.

32. Ways to Elaborate a Given Business
Existing Product
New Product
Product
Development
Strategies
Penetration
Strategies
Existing
Market
Market
Development
Strategies
Diversification
Strategies
New
Market
Figure 5
101

33. Questions ?

34. End of Presentation