1. STRATEGIC MANAGEMENT AND BUSINESS POLICY
Business-level strategies
(c) Dr. Azhar Kazmi 2008

2. Major Type of Corporate strategies.
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3. Learning objectives
Examine how corporate-level strategies, business definition, and business model act as the foundations for business strategies
Observe how industry structure and positioning of the firm in the industry help to determine the competitive advantage
Discuss and exemplify achieving cost leadership, differentiation, and focus generic business strategies, conditions under which each of these are used, their benefits and risks
Describe the two types of tactics used for business strategies: timing and market location
Explain business strategies for four different industry conditions
Deliberate on leveraging home country advantages and organisation-specific advantages for international business strategies
Discuss the role of digitalisation for cost leadership, differentiation, and focus business strategies
(c) Dr. Azhar Kazmi 2008

4. Foundations of business Level strategies
Business strategies are the courses of action adopted by an organisation for each of its businesses separately to serve identified customer groups and provide value to the customer by satisfaction of their needs.
Corporate-level strategies lay down the framework in which business strategies operate.
The function of corporate-level strategy is to deal with a portfolio of businesses in such a manner that the overall returns are optimised.
Business definition is at the core of business strategies.
(c) Dr. Azhar Kazmi 2008

5. Choice of competitive strategy
Industry structure based on five competitive forces:
1-Threat of new entrants;
2-Threat of substitute products or services;
3- Bargaining power of suppliers; Bargaining power of buyers;
5-Rivalry among the existing competitors in an industry
Positioning of firm in the industry
Competitive advantage-mass production, mass distb, low cost
Competitive scope-breadth of target with industry
(c) Dr. Azhar Kazmi 2008

6. Porter,s Generic business strategies
1-Cost leadership
2-Differentiation
Broad target
COMPETITIVE SCOPE
3-Focussed Cost leadership
Narrow target
3-Focussed differentiation
Low-cost products/services
Differentiated products/services
COMPETITIVE ADVANTAGE
(c) Dr. Azhar Kazmi 2008

7. Cost leadership business strategy
When the competitive advantage of an organisation lies in lower cost of products or services relative to what the competitors have to offer, it is termed as cost leadership.
Achieving cost leadership
Conditions under which cost leadership strategy is used
Benefits and risks of cost leadership strategy
(c) Dr. Azhar Kazmi 2008

8. Conditions where cost leadership is used
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9. Question for class discussion
What are benefits of cost leadership
What are risks of cost leadership
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10. Benefits of Cost leadership
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11. Cost Leadership Risks
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12. How to Achieve low cost leadership
Accurate demand forecasting; Hi Capacity utilization
Economy of scale- large factory
Standardization of pars, packaging and services
Aim at average customer- high volume
Investment in cost saving technologies
Withhold differentiation till essential
(c) Dr. Azhar Kazmi 2008

13. Differentiation business strategy
When the competitive advantage of an organisation lies in special features incorporated into the product / service which is demanded by the customers who are willing to pay for it then the strategy adopted is the differentiation business strategy.
Achieving differentiation
Conditions under which differentiation is used
Benefits and risks of differentiation strategy
(c) Dr. Azhar Kazmi 2008

14. How to Achieve Differential ?
Incorporate a feature in product that-
Matches taste and preference of target user
Reduces over all cost to buyer
Raises performance of product
Increases tangible or intangible satisfaction
Offers promise of higher quality product or service
Enhances status or prestige in buyer group
Offer full range of products/services for customer satisfaction
(c) Dr. Azhar Kazmi 2008

15. Conditions where differentiation strategy can be used
Very large market, few cos. with standard products
Customer needs too diversified
Possible to charge premium from valued customers
Brand loyalty possible for the Product
Differentiation can increase sales
(c) Dr. Azhar Kazmi 2008

16. Benefits of differentiation strategy
Customer loyalty as safeguard against competition
Better pricing possible
Makes new entry difficult
Less threat from substitute products
Customers less sensitive to prices variations
(c) Dr. Azhar Kazmi 2008

17. Risks of differentiation strategy
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18. Focus business strategy
Focus business strategies essentially rely on either cost leadership or differentiation but cater to a narrow segment of the total market.
Achieving focus
Conditions under which focus strategies are used
Benefits and risks of focus strategies
(c) Dr. Azhar Kazmi 2008

19. How to implement focused Strategy
Choose niche, identify gaps in other two strategies
Create Superior skills to cater to niche
Create superior efficiencies for serving niche
Develop innovative value chain
(c) Dr. Azhar Kazmi 2008

20. Tactics for business strategies
Timing tactics
First movers and late movers
Advantages and disadvantages of being a first mover
Market location tactics
Market leader
Market challenger
Market follower
Market nichers
(c) Dr. Azhar Kazmi 2008

21. Business strategies under different industry conditions
MARKET SIZE
Embryonic
Growth
Maturity
Decline
TIME
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22. Business strategies Business strategies and internationalisation
Leveraging home country advantages for businesses
Leveraging organisation specific advantages for businesses
Business strategies and digitalisation
Digitalisation and competitive advantage
Digitalisation and cost leadership
Digitalisation and differentiation
Digitalisation and focus
(c) Dr. Azhar Kazmi 2008

23. Next Session Strategic Analysis of Choice Reading: Chapter-9
Case Study: Bajaj Allianze
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