Business-LevelStrategy

Ch4-,1,Chapter 4,Business-Level Strategy,Chapter 3,Internal,Environment,Chapter 2,External,Environment,The Strategic,Management,Process,Strategic Intent,Strategic Mission,Strategic,Competitiveness,Above Average,Returns,Feedback,Strategy Formulation,Chapter 4,Business-Level,Strategy,Chapter 5,Competitive,Dynamics,Chapter 6,Corporate-Level,Strategy,Chapter 8,International,Strategy,Chapter 9,Cooperative,Strategies,Chapter 7,Acquisitions&,Restructuring,Strategy Implementation,Chapter 10,Corporate,Governance,Chapter 11,Structure,&Control,Chapter 12,Strategic,Leadership,Chapter 13,Entrepreneurship,&Innovation,Strategic,Inputs,Strategic,Actions,Strategic,Outcomes,Chapter 4,Business Level,Strategy,Sustainable,Competitive,Advantage,Chapter 2,External Environment,Chapter 3,Internal Environment,Business Level Strategy,Actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific,individual product markets.,Basis for Customer Segmentation,Consumer Markets,1.Demographic factors(age,income,sex,etc.),2.Socioeconomic factors(social class,stage in the family life cycle),3.Geographic factors(culture,region or country differences),4.Psychological factors(lifestyle,personality traits),5.Consumption patterns(heavy,moderate,and light users),6.Perceptual factors(benefit segmentation,perceptual mapping),7.Brand loyalty patterns,Basis for Customer Segmentation,Industrial Markets,1.End use segments(identified by SIC code),2.Product segments(based on technological differences or production economics),3.Geographic segments(defined by boundaries between countries or by regional differences within them),4.Common buying factor segments(cut across product/market and geographic segments),5.Customer size segments,Generic Business Level Strategies,Cost,Uniqueness,Source of Competitive Advantage,Breadth of Competitive Scope,Broad,Target,Market,Narrow,Target,Market,Focused Differen-,tiation,Cost,Leadership,Differen-,tiation,Focused Low Cost,Cost,Leadership,Key Criteria:,Cost Leadership,Business Level Strategy,Relatively standardized products,Features acceptable to many customers,Lowest competitive price,Requirements:,Constant effort to,reduce costs,through:,Building efficient scale facilities,State of the art manufacturing facilities,Simplification of processes,Minimizing costs of sales,R&D and service,Monitoring costs of activities provided by outsiders,Tight control of production costs and overhead,Cost Leadership,Business Level Strategy,Primary Activities,Support,Activities,Technological Development,Human Resource Management,Firm Infrastructure,Procurement,Inbound,Logistics,Operations,Outbound,Logistics,Marketing,&Sales,Service,MARGIN,MARGIN,Value Creating Activities,Common to a,Cost Leadership,Business Level Strategy,Primary Activities,Support,Activities,Technological Development,Human Resource Management,Firm Infrastructure,Procurement,Inbound,Logistics,Operations,Outbound,Logistics,Marketing,&Sales,Service,MARGIN,MARGIN,Cost Effective MIS Systems,Relatively Few Management Layers to Reduce Overhead,Simplified Planning Practices to Reduce Planning Costs,Consistent Policies to Reduce Turnover Costs,Effective Training Programs to Improve Worker Efficiency and Effectiveness,Highly Efficient Systems to Link Suppliers Products with the Firms Production Processes,Timing of Asset Purchases,Efficient Plant Scale to Minimize Manufacturing Costs,Selection of Low Cost Transport Carriers,Delivery Schedule that Reduces Costs,National Scale Advertising,Products Priced to Generate Sales Volume,Small,Highly Trained Sales Force,Effective Product Installations to Reduce Frequency and Severity,of Recalls,Easy-to-Use Manufacturing Technologies,Investments in Technology in order to Reduce Costs Associated with Manufacturing Processes,Systems and Procedures to find the Lowest Cost Products to Purchase Raw Materials,Frequent Evaluation Processes to Monitor Suppliers Performances,Located in Close Proximity with Suppliers,Policy Choice of Plant Technology,Organizational Learning,Efficient Order Sizes,Interrelationships with Sister Units,Value Creating Activities,Common to a,Cost Leadership,Business Level Strategy,How to Obtain a Cost Advantage,1.Determine and Control Cost Drivers,2.Reconfigure the,Value Chain,as needed,Alter production process,Change in automation,New distribution channel,Direct sales in place of indirect sales,New advertising media,New raw material,Backward integration,Forward integration,Change location relative to suppliers or buyers,Reconfiguring the Value Chain,of Iowa Beef Packers(IBP),Ranch Cattle,Ship“on the Hoof”to Rail Center(Chicago),Slaughter into sides of beef,“,Boxed Cuts”at Markets,Old,Way:,Save on shipping and cattle weight loss,Utilize cheaper non-union rural labor,New,Way,New,Way:,Locate large automated plants near ranches,Process into“Boxed Cuts”at plants,Ship cuts already“Boxed”to Markets,Choices That Drive Costs,Economies of scale,Asset utilization,Capacity utilization