Create a business-level strategy for a firm in the hotel (or furniture) industry. You could use one of the five business-level strategies.1. Cost leadership2. differentiation3. focused cost leadership4. focused differentiation5. integrated cost leadership/differentiationc_4.pptxChapter 4
Business-Level Strategy
Part 2 Strategic Actions: Strategy Formulation
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Presentation design
by Charlie Cook
Business-Level Strategy (Defined)
• An integrated and coordinated set of
commitments and actions the firm uses
to gain a competitive advantage by
exploiting core competencies in specific
product markets.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–2
• Perform activities differently
• Perform different activities than rivals
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–3
Customers: Their Relationship
with Business-Level Strategies
Who will be
served?
Key Issues
in
Business-level
Strategy
What needs will
be satisfied?
How will those
needs be satisfied?
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–4
Who: Determining the Customers
to Serve
• Market segmentation
– A process used to cluster people with similar needs
into individual and identifiable groups.
All Customers
Consumer
Markets
Industrial
Markets
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–5
Table 4.1
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 (cultural, regional, and national differences)
4. Psychological factors (lifestyle, personality traits)
5. Consumption patterns (heavy, moderate, and light users)
6. Perceptual factors (benefit segmentation, perceptual mapping)
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
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–6
Adopt from David Aron 2014
4–7
Adapted From David Aron, 2014
4–8
Figure 4.1
Five Business-Level Strategies
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–9
Figure 4.2
Examples of Value-Creating Activities Associated with the Cost Leadership Strategy
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–10
Cost Leadership Strategy (cont’d)
• Competitive Risks
– Processes used to produce and distribute good or
service may become obsolete due to competitors’
innovations.
– Too much focus on cost reductions may occur at
expense of customers’ perceptions of differentiation.
– Competitors, using their own core competencies, may
successfully imitate the cost leader’s strategy.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–11
Figure 4.3
Examples of Value-Creating Activities Associated with the Differentiation Strategy
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–12
Competitive Risks of Differentiation
• The price differential between the differentiator’s
product and the cost leader’s product becomes
too large.
• Differentiation ceases to provide value for which
customers are willing to pay.
• Counterfeit goods replicate the differentiated
features of the firm’s products.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–13
Focus Strategies
• An integrated set of actions taken to produce
goods or services that serve the needs of a
particular competitive segment.
– Particular buyer group—youths or senior citizens
– Different segment of a product line—professional
craftsmen versus do-it-yourselfers
– Different geographic markets—East coast versus
West coast
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–14
Factors That Drive Focused Strategies
• Large firms may overlook small niches.
• A firm may lack the resources needed to
compete in the broader market.
• A firm is able to serve a narrow market segment
more effectively than can its larger industry-wide
competitors.
• Focusing allows the firm to direct its resources to
certain value chain activities to build competitive
advantage.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–15
Competitive Risks of Focus Strategies
• A focusing firm may be “outfocused” by its
competitors.
• A large competitor may set its sights on a firm’s
niche market.
• Customer preferences in niche market may
change to more closely resemble those of the
broader market.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–16
Integrated Cost Leadership/
Differentiation Strategy
• Often involves compromises
– Becoming neither the lowest cost nor the most
differentiated firm.
• Becoming “stuck in the middle”
– Lacking the strong commitment and expertise that
accompanies firms following either a cost leadership
or a differentiated strategy.
© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4–17

Purchase answer to see full
attachment




Why Choose Us

  • 100% non-plagiarized Papers
  • 24/7 /365 Service Available
  • Affordable Prices
  • Any Paper, Urgency, and Subject
  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee

How it Works

  • Click on the “Place Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the "PAPER DETAILS" section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.