...Roll Number: J060 Subject: Strategic Management Topic: Summary Article on Business Level Strategy In the pursuit of operationalising the concept of business-level strategy in research, Donald C. Hambrick explains that strategy is generally viewed as a pattern of important decisions that guides the organization in its relationships with its environment, affects the internal structure and processes of the organization, and centrally affects the organization's performance. Numerous variables (e.g., nature of the industry, product life cycle,other environmental attributes) can be introduced to enrich the array of possible strategy-performance theories to be tested. Miles and snow [1978] have systematically examined the linkage between business-level strategy and structure. The range of organizational processes and managerial activities that could be tested for their associations with business level strategies appears to be substantial. Research on business-level strategy has implicated basically four different approaches to operationalising the construct. First, some researchers have seen strategy as a situational art that can best be studied through in-depth case studies. When cases are used in an attempt to build theory, they likewise involve qualitative descriptions of business-level strategies. An attraction of textual characterizations of strategy is that they may be used when strategy is treated as a predictor, mediator, or criterion variable in a research design...
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...BUSINESS-LEVEL STRATEGY By Alan S. Gutterman 1 Abstract Growth is a key goal and objective for emerging companies and management must carefully determine the best way to combine the core competencies within a firm’s functional departments to provide the firm with the best opportunity for achieving and sustaining a competitive advantage in its chosen environment. This report focuses on the process of setting business level-strategy, which includes (1) selecting the domain(s) in which the firm will be competing for scarce resources (e.g., capital, personnel, technology, inputs and customers) and (2) positioning the firm in each chosen domain so that its function-based core competencies are most effectively leveraged to establish a competitive advantage. The overall goal of business-level strategy is to protect the firm’s position in its current domain and, if possible, enlarge the domain in which the firm can operate with a competitive advantage. I. Overview Senior executives and managers involved in the development and implementation of business-level strategies are tasked with identifying the core competencies within the various functional departments of the company and combining them in a way that provides the company with the best opportunity for achieving and sustaining a competitive advantage in its chosen environment. The key choices that must be made when setting business-level strategy include: (1) selecting the domain(s) in which the company will...
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...Business Level Strategies The low cost strategy emphasizes having the lowest cost but not necessarily the lowest price in the market. A firm attempting to realize a low cost strategy should stress resources that facilitate efficiency. A firm that has successfully achieved a low cost position will have the lowest cost relative to competitors. It can use such a position to either lower its prices and gain market share and sales from rivals or keep its price at the present market level and make more profit. The key idea is that cost and price are independent and this strategy is focused on cost. The differentiation strategy focuses on developing a unique product or a perception of a unique product that customers are willing to pay a premium for. If a firm is not receiving a premium price for its goods it is not a differentiator. If it is seeking to follow a differentiation strategy it should attempt to develop and enhance its resources that promote customer responsiveness, quality and innovation. Costs are still important because it could possibly be greater than the premium consumers are willing to pay. The focused strategy is serving the needs of a limited group or segment very well. Often times this is a remainder category for firms that clearly don’t have a cost advantage of some type nor receive a premium price for their product. A firm with this strategy must carefully consider its target market and what they desire. None of the three business level strategy is...
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...through Business-level strategies. Business level strategies detail actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific, individual product or service markets. Business-level strategy is concerned with a firm's position in an industry, relative to competitors and to the five forces of competition. Customers are the foundation or essence of a organization's business-level strategies. Who will be served, what needs have to be met, and how those needs will be satisfied are determined by the senior management. Who are the customers? Demographic, geographic, lifestyle choices (tastes and values), personality traits, consumption patterns (usage rate and brand loyalty), industry characteristics, and organizational size. What are the goods and/or services that potential customers need? Knowing ones customers is very import in obtaining and sustaining a competitive advantage. Being able to successfully predict and satisfy future customer needs is important. (Perhaps one of Compaq's mistakes was not understanding who their real customer was and what that customer -- end user -- wanted.) How to satisfy customer needs? Organizations must determine how to bundle resources and capabilities to form core competencies and then use these core competencies to satisfy customer needs by implementing value-crating strategies. Business-Level Strategies There are four generic strategies that are...
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...Lecture Week 7! Business Level Strategy! 2 ! 1 ! Learning Outcomes – Week 7! Be able to! • Identify Strategic Business units in Organisations! • Explain the different bases of achieving competitive advantage! • Explain the factors influencing the sustainability of competitive advantage! • Explain the relationship between competition and collaboration ! 3 ! Strategic Choices ! Exhibit III.1! 4 ! 2 ! Business Level Strategy - Outline! • Strategic business units! • Competitive advantage (strategy clock)! – Price-based! – Differentiation! – Hybrid and focus! • Sustainability of competitive advantage! • Co-operation and competition! • Game theory in competitive strategy! 5 ! Business Level Strategies! Exhibit 5.1! 6 ! 3 ! Strategic Business Units! A strategic business unit is a part of an organisation! for which there is a distinct external market for goods or services that is different from another SBU! • Opposing pitfalls in identifying SBUs! – Too many different products/markets means lack of focus! – Too few means not reflecting diversity of products/markets! 7 ! Criteria for Identifying SBUs! External! Same customer types! Same channels! Similar competitors! Internal! Similar products/ services! Similar technologies! Similar resources and competences! 8 ! 4 ! Bases of Competitive Advantage! • Competitive strategy! – The bases for achieving competitive advantage ! – The bases for providing best...
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...Business-Level and Corporate Level Strategies General Motors (GM) is a public company based in the United States that is headquartered in Detroit, Michigan. In the year 2011, the company was able to acquire the title of the largest automaker in the world by achieving the highest number of vehicle unit sales since inception (General Motors, 2012). General Motors led global automobile unit sales for 77 consecutive years from 1931 through 2007; however, the company lost its position to Toyota, which has continued to dominate the market with GM standing at second. The core competencies of a corporate corporation are focused on ensuring that the business entity is able to satisfy the needs and preferences of their customers. This stands as the main determinant in realizing above average returns especially in a highly competitive business environment. This is achieved through business level strategies, which are strategies that outline the various actions to be taken in order to ensure that the company is able to provide value to its customers in addition to gaining the critical competitive advantage by utilizing its core competencies in specific, service markets or individual products. Business level strategy therefore pertains to the corporation’s firm position in its operating industry compared to its main competitors and the five forces of competition. One of the fundamental business level strategies that General Motors has employed is cost leadership. The company has...
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...Development in the West Malaysia Most of labor force in Malaysia resides in the east Malaysia rural areas. However, the rural areas are not well developed with problems in health and hygiene sectors. These areas must be developed in order to provide a fully functional workforce. Controlling the growth Growth is always desirable for an industry like this. However, the growth rate must not exceed the limit where it cannot be supported by the infrastructure. Otherwise problems such as environmental degradation may occur. The growth rate in trade should be proportional to the infrastructure development of the country. o Further development of trade policies Trade policies shape the way international business is conducted. At the present time, Malaysia’s trade policies are developing to accommodate the growth of foreign trade. This area must be focused on to a greater extent, the authorities must look to lower more trade barriers, and reduce tariffs and taxes in order to follow an open market philosophy. Conclusion As a final thought, it can be said that investing in a foreign country is by itself a very risky endeavor. Analysis of Political, Social, Economical and Technological factors, measuring the competitive advantage of the host country and finally deciding on an appropriate entry mode are all equally important in the decision making process. Throughout this project, we have tried to analyze the profitability of investing in the palm oil production...
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...lifestyle/boutique, signature, select services and extended stay. Marriott own chains such as Marriott Hotels & Resorts, Courtyard by Marriott, Residents Inn, Fairfield Inn, and Marriott Vacation Club International, BVLGARI, The Ritz Carlton just to name a few. The commonality between all of the properties that Marriott International owns is that they all have a clear business-level strategy that allows them to focus on particular customer groups. Analyze the business strategies for the corporation you chose to determine the business level strategy you think is most important to the long –term success of the firm and whether or not you judge this to be a good choice. Justify your opinion. Marriott business strategies vary depending on the lodging segment. Examples include the Residents Inn is focused on customers that need amenities that go beyond the average but allow the traveler to have a sense of freedom, like they are at home or the Marriott Vacation Club International, which is classified as a luxury timeshare operation. The Fairfield Inn chain is currently using a focused cost leadership business-level strategy. In Fairfield Inns, there are several things that allow the Marriott Company to control cost and offer accommodations at a reduced rate to customers. There are usually no full-scale restaurants within in the main hotel. This means that the company does not have to employ staff to run it, which is costly to the bottom line. Also, the company uses value linens and furnishings...
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...food restaurants in the fast food industry serving around 68 million people daily, in over 118 countries. McDonald’s has a loyal based of customers who have been patronizing the establishment for many years, operated by a franchise agent, an affiliate or the corporation. McDonald’s business strategies has been said to be the best in the fast food industry, maintaining cost leadership while producing dependable food with great service. Today we see McDonald’s in a mature industry that uses product proliferation to meet many needs in the fast food industry while deterring new entrants (Hill and Jones, 205). McDonald’s prides their strategy by setting the standards with their products and within the industry as well. I feel that the strategy McDonald’s incorporates within the company is the best for them, setting the standard to be the best in the industry promotes the necessary competitive edge needed to ensure the company continues to delivery its winning edge products that keeps customers loyal to the name. McDonald’s is also known for their child meal concepts selling hamburgers French fries soft drinks breakfast items chicken sandwiches and deserts. McDonald’s business level strategy also responds to the competitive dynamics of the industry by innovating new products, such as the Snack Wrap, market penetration, such as into the...
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...Business level strategy of Samsung Introduction Samsung Group (Samsung, 2016) is the largest group or the giant in Korea. Samsung Electronics is the biggest subsidiary of it, which initiated in 2011. A Korean consolidated company generates an average income of $ 150 billion every year. Samsung Electronics has 144 consolidated subsidiaries which 28 were recently combined at the end of 2014. Samsung Electronics contains three core divisions: • Device Solutions, a Business to Business (B2B) division handling semiconductors, various other chips and also Liquid Crystal Display (LCD) and other components.. • Digital Media & Communications (DM&C) is primarily a Business to Consumer (B2C) Company making computers, television sets and phones and also everything in between. • Samsung Advanced Institute of Technology (SAIT) is the research power of Samsung that likewise manages (at the moment) its brand-new companies. The three company divisions deal with nine business level units. Image 1 These all units are regulating by each different ways. Numerous marketing and advertising strategies, various marketing projects, different devices, various PhD owners, in addition to numerous purposes with goals For that reason these products are numerous business devices of Samsung Company. Important point is that there are numerous rivals for each system around the world with suitable competitors that needs to manage each unit by various business unit level techniques. Business Level Strategies ...
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...Strategic management 1. What are the specific risks associated with using each business-level strategy? Seldom are there markets in which only one business exists, and as we expand into global markets the need to differentiate products, services and even customer service are a necessity. When evaluating the company’s position and the different levels of strategy, we must also take into account the diverse aspects of risk and the how the direct correlation between your mission and strategy could bring obsolete processes in innovation, non-continuation of value when substitutes exist at lower prices, and how customers view may conform to an industry wide perspective compared to a more specialized focus. These different risks can be associated with the five different business-level strategies. In this topic question I will discuss cost leadership strategy and the different risks that can hinder this particular business strategy. In cost leadership we find that a company targets a broad market and offers certain features in their products or services at a lower cost in relation to their competitors. Cost leaders are on a constant search within their organization and value chain to try and eliminate or reduce certain factors of production, which in turn would provide a higher margin in profits. Most cost leader organizations look to outsource customer service, or develop new technology systems to create more efficiency on inbound/outbound logistical activities, practiced...
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...Chapter Assignment Business Level Strategy 1. Toyota’s business level strategy is that of overall cost leadership. 2. Toyota has been experiencing problems with its accelerators sticking on its vehicles, causing the cars to speed out of control, as well as issues with the overall quality of its vehicles. 3. The three major interrelated reasons that caused Toyota’s problems are its hyper focus on cutting costs, which led to poor quality, its rapid growth strategy, and its corporate strategy from that of its founders. 1. Toyota has used several strategies to solve its recent dilemmas. These strategies include introducing the Lexus LFA to present a more aggressive sportier brand image of Lexus vehicles, building multiple plants in the USA to produce Toyota vehicles to reduce lead time and import issues, shrinking its board of directors by half, having the CEO meet with his top five advisers every Tuesday morning in an informal manner to make decisions on the spot, as well as beginning to emphasize the design of high quality interiors. 2. I believe that shrinking the board of directors and building manufacturing plants within the United States will ensure Toyota’s future success since these decisions will enable better communication between US executives and their Japanese counterparts as well as enable much faster delivery of vehicles to the US market. 1. Providence Medical Center’s business level strategy is that of differentiation. 2. PMC...
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...Professor Rufus Robinson Assignment 3: Business-Level and Corporate-Level Strategies Business 499 February 17, 2014 The business that I chose to research is General Electric. GE is one of the oldest and largest businesses in the United States. They are ranked #26 largest firm in the U.S and the 14th most profitable. GE is a massive, diversified and profitable conglomerate with a lot of very good but unrelated businesses. GE has expanded to incorporate television, airplane engines, medical devices, household appliances and commercial financing. Analyzing GE’s business-level strategy is somewhat difficult being that GE has so many different divisions. Any of these products would serve as a large and viable business on its own but GE has them all under one corporate umbrella. GE’s business level strategy states “GE is building the world by providing capital, expertise and infrastructure for a global economy. GE Capital has provided billions in financing so businesses can build and grow their operations and consumers can build their financial futures. We build appliances, lighting, power systems and other products that help millions of homes, offices, factories and retail facilities around the world work better.” Figure 1 GE’s Organizational Structure and Business Portfolio. 2001 Figure 2 GE’s Organizational Structure and Business Portfolio. 2007 What is most important to the long-term success of GE is long term growth and investing in innovative opportunities...
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...Through Their Expansion Plans, How will Porter Airlines Effectively Utilize Their Low-Cost Business Level Strategy to Increase Their Customer Base? Table of Contents Executive Summary…………………………………………………………………….p. 3 Porter Airlines…………………………………………………………………………..p. 4 The Expansion..………………………………………………………………………...p. 4 What is Organizational Strategy………………………………………………………..p. 7 Porter Airlines Business Level Strategy………………………………………………..p. 9 Core Competencies …………………………………………………………….p. 9 Competitive Advantage………………………………………...………………p.12 Low Cost Business Level Strategy………………………………………...…..p. 13 Low Cost Business- Level Structure………………………………………………….p. 15 Conclusion…………………………………………………………………………….p. 17 Appendix……………………………………………………………………………...p. 18 References…………………………………………………………………………….p. 20 Executive Summary Porter asserts that their secret to success relies in combining a low-cost business-level strategy with a focus on higher yield passengers who value premium service (Preville, 2014). The company has been profitable for the last two years, and as a result has been focusing efforts on expanding their domain and customer base. After conducting an interview with an operations manager at the company, Ashley Hammill, I was able to acquire information about the company’s expansion plans, business strategy and structure (See Appendix A). I will be using the information provided by her primarily, with some secondary sources allowing me to go into further detail about the company....
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...Business-Level and Corporate-Level Strategies – Ford Motor Company Strayer University BUS499, 14 February 2016 Business-Level and Corporate-Level Strategies – Ford Motor Company It all began in 1896 when Henry Ford built the Quadricycle that rode on four bicycle wheels, operated by a four-horsepower engine with only two forward gears and no reverse ability. Henry soon joined a group that founded the Detroit Automobile Company but left within one year and would soon incorporate the Ford Motor Company with 12 investors and 1,000 shares in 1903. The Ford Model A was the first car sold on July 23, 1903 (http://www.corporate.ford.com). Ford Motor Company has endured many challenges during its 113 years in business. Altering business strategies and staying competitive have not been easy against other car companies, however they have overcome and are focusing on the One Ford Plan (One Team, One Plan, and One Goal) and their vision for future success. 1. Business Level Strategy The business level strategy deployed by Ford Motors is the cost leadership strategy, which puts emphasis on operating at lower costs, but not essentially offering the lowest prices in the market (Haines 2004). Therefore, a firm can use such a position to reduce its prices in order to increase its market share or maintain the current prices and increase its revenue per unit items compared to its competitors. The principal idea of the low cost strategy is that cost and prices are not dependent, and the...
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