Business Strategy: Differentiation, Cost Leadership and Blue Oceans Flashcards
What is business strategy?
The decision to choose a different set of activities to deliver a unique mix of value to outperform competitors.
How is outperformance measured?
Through market share, profitability, and share price.
What defines competitive advantage?
The ability to outperform competitors in a shifting battlefield, influenced by stakeholder dynamics.
What is business-level strategy?
Goal-directed actions to achieve competitive advantage in a single product market, answering “How should we compete?”
What questions are addressed in business-level strategy
Who: Which customer segments?
What: What customer needs will we satisfy?
Why: Why do we want to satisfy them?
How: How will we satisfy customers’ needs?
What are Porter’s Five Forces?
Threat of new entrants
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitutes
Competitive rivalry
What factors define competitive advantage?
Value position and cost position.
What are the three generic business strategies?
Cost leadership
Differentiation
Blue ocean strategy
What is a strategic position?
A profile based on value creation and cost in a specific market, maximizing product value while minimizing costs.
What are strategic trade-offs?
Choices between value creation and cost management aimed at maximizing economic value creation and profit margins.
