Presentation on theme: "STATEGY AND COMPETITIVE ADVANTAGE"— Presentation transcript:
1 STATEGY AND COMPETITIVE ADVANTAGE CHAPTER 5STATEGY AND COMPETITIVE ADVANTAGE
2 Business Level Strategy What are the five Generic Business Level Strategies?Are the generic business level strategies only useful in certain industries?According to the generic strategies model, what are the two factors that determine the source of competitive advantage?According to the generic strategies model, what does it mean to have a Focused generic strategy?
3 Figure 5.1: The Five Generic Competitive Strategies Market TargetType of Advantage SoughtOverall Low-CostProviderStrategyBroadDifferentiationFocusedLow-CostBest-CostLower CostRange of BuyersNarrowBuyerSegmentor Niche
4 Cost Leadership Strategy Under a cost leadership strategy are theproducts offered standardized or customized?The features of products offered True Falseby firms using a cost leadershipstrategy are essential.Firms using a cost leadership strategy believethat their competitive advantage is that they offercustomers products with the ______ _______.Are there risks associated with a cost leadershipstrategy?
5 Cost Leadership Strategy Firms pursuing a cost leadership strategy:Do not need scale facilities. True FalseShould simplify processes True FalsePrimarily focus on the value True Falsechain activities of Sales, R&D,and Service.What are some things a that Nucor (pg. 154) did tolower costs in its value chain?
6 Three Key Questions How can an activity be performed differently or even eliminated?How can a group of linked value activities beregrouped or reordered?How might coalitions with other firms lower oreliminate costs?What might you do to make Giuseppe morecost competitive? Daimler?
7 Benefits of Successful Differentiation A product / service with unique and appealing attributes allows a firm toCommand a premium price and/orIncrease unit sales and/orBuild brand loyalty= Competitive Advantage
8 Differentiation Business Level Strategy A differentiation strategy requires True Falsethat product offerings have uniquefeatures.The product offerings of firms True Falsepursuing a differentiation strategy aretypically higher price.What companies in the cases we read so far followeda differentiation strategy? What attributes madethe products differentiated?
9 Differentiation Business Level Strategy Firms pursuing a differentiation True Falsestrategy need to be concernedabout innovation.strategy do not need to beconcerned about customer service.A broad product line is True Falseconsidered to be one of thepossible characteristics of adifferentiation strategy.Are there some risks of a differentiation strategy?
10 Industry Conditions and Low Cost or Differentiation Strategy Which strategy is best in an industry or segmentwith price sensitive consumers?Which strategy is preferred when the industry hasmany different buyer segments?Which strategy is best when the industry hasbuyers that use the product in the same ways?When an industry has high brand loyalty thenwhich strategy is preferred?
11 Focused Business Level Strategy What is a niche?A niche strategy has to focus on True Falsebeing low cost and differentiated.Firms chose a focused strategy True Falsebecause narrow segments arebeing poorly served.Industry-wide competitors usually True Falsecan serve the special needs ofnarrow segments.
12 Focused Business Level Strategy Firms using a focused strategy are True Falsenot at risk of being out-focused.Large competitors are not concerned True Falsewith the niche market.Niche market preferences do not True Falsechange.
13 Generic Business Level Strategies Source of Competitive AdvantageCostUniquenessBroadTargetMarketBestCostProviderBreadth of Competitive ScopeNarrowTargetMarket
14 Best Cost Provider What does a firm try to accomplish with a best-cost strategy?How does a best cost strategy and a low-coststrategy differ?When does a best-cost strategy out-compete botha low-cost provider and a differentiator?What are the risks of a best-cost strategy?
15 Cooperative Strategies What are some forms of cooperative agreements?Why do firms have cooperative agreements?What are some reasons that alliances fail?
16 Vertical Integration and Outsourcing What is the benefit of backward integration to afirm?What does industry backward integration mean forpotential new entrants?What are the benefits for forward integration for aWhat are some of the disadvantages of verticalintegration?What is outsourcing?
17 Outsourcing What is outsourcing? Why do firms decide to outsource? What are the disadvantages of outsourcing?