business strategy and models

Question 1

four generic strategic positions

Answer 1

low price - strive to compete by offering a product or service at such a low cost that can outsell competitors and still earn good profit margin

differentiation - strive to compete by offering unique technical or design features at relatively high prices

premium - strive to compete by offering highest quality and rare technical and design features to narrow market segment at high prices

blue ocean - strive to compete by entering new market spaces with an innovative product and a value proposition based on good price and unique features

Question 2

premium brands focus

Answer 2

-serving the needs of a particular customer segment or group
Price insensitive customers within bounds

Question 3

red vs blue ocean

Answer 3

• Red oceans represent all industries in existence today
  
  • They have defined rules, competitors and marketing boundaries
  • Blue ocean represent all industries NOT in existence today
    This is undefined market space, otherwise known as opportunity

Question 4

rules guiding the most successful businesses through all of their important decisions

Answer 4

rule 1- better before cheaper
rule 2- revenue before cost
rule 3 - there are no other rules - changing anything you must to follow those two rules

Question 5

intense intra-group rivalry

Answer 5

firms within the same strategic group compete directly, leading to stronger rivalry than with firms outside the groups

price wars, innovation races and marketing battles are common

Question 6

Differentiated value propositions

Answer 6

Strategic groups target distinct customer segments or offer unique benefits.
🔹 Examples include budget airlines vs. premium airlines, or luxury car brands vs. economy brands.

Question 7

Profitability variations across groups

Answer 7

🔹 Some strategic groups enjoy higher profitability due to stronger brand positioning, economies of scale, or niche dominance.
🔹 Others face more intense competition, leading to lower margins.

Question 8

Mobility Barriers

Answer 8

🔹 Factors like brand reputation, capital investment, technological expertise, or regulatory constraints limit firms from easily shifting between strategic groups.
🔹 Example: A discount retailer may struggle to enter the luxury market due to brand perception.

Question 9

Strategic Group mapping

Answer 9

🔹 A visual tool used to analyze how firms are positioned relative to each other based on key strategic dimensions (e.g., price vs. quality).
🔹 Helps firms identify competitive threats and market gaps.