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Rothaermel Exercise

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Rothaermel Exercise Assignment 2
Shane Taylor
BUSI 690
Liberty University

Rothaermel Exercise 2 Assignment
6.1: There are drawbacks and risks of both broad generic business strategy and focused strategy.
Focused strategy’s lowcost could be a potential drawback and risk. Especially if the competition is able to lower their cost offering there product and service at a comparable price.
Acording to the text, the product/service cost can be difficult in industries where economies of scale play a significant role. And as technology increases and companies become more innovative competition is likely to increase and close in. Another drawback addressing the focus strategy low prices may also result in a negative potential customer mind-set towards the quality of the product. “Low cost leadership when combined with low prices can bring about to a disadvantage which is less customer loyalty” (Vokurka & Davis, 2004). Other risks of focus strategies include the ease of imitation. The potential drawback is the niche may no longer be a niche. On the contrarary, the broad market strategyfirm will adapt its product and services for competing directly.
6.4: Value Chain Components consist of five key firm activities. The first activity of the internal value chain is the supply chain management. This consist of the receiving of merchandise and products, warehousing, and the firms inventory control system. Operations which are the value creating activities that transform the fims inputs into the final product. Distribution which is also considered a firms outbound logistics are the activities required to get the finished product to the customer. And the final activity is a firms marketing and sales. Considered by many firms as the the most critical activity. Knowing the needs and wants of the customers and creating awareness among the target audience

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