ch.6 Business Strategy: Differentiation, Cost Leadership, and Integration

Question 1

Define business-level strategy and describe how it determines a firm’s strategic position.

Answer 1

business level strategy is how we conduct business.
it discuss the 4W and H
strategic position is how is determined by business strategy because it tells the company how to position itself with regard to value and cost. High value = higher cost
strategic trade-offs

Question 2

Value creation

Answer 2

Value> cost

Question 3

Examples of business strategy

Answer 3

Differentiation and Cost leadership

Question 4

scope

Answer 4

choosing to pursue specific niche market or go broader

Question 5

goal of differentiation strategy.

Answer 5

the goal of differentiation strategy is to increase the perceived value goods & services

Question 6

Differentiation strategy

Answer 6

non price attributes is focus of competition

Question 7

unique value drivers (differentiation strategy)

Answer 7

1. product features
2. customer service
3. customization
4. complements
   they only help competitive advantage if they exceed value more than increase in the cost

Question 8

Competitive advantage =

Answer 8

value created> then competitors

Question 9

goal of cost leadership strategy

Answer 9

the goal is to decrease cost belows

Question 10

unique cost drivers

Answer 10

1. input factors
2. economies of scale
3. learning curve
4. experience curve

Question 11

dis/economies of scale,MES

Answer 11

basically talking about that graph
economies of scale is when the per unit cost of an output goes down
MES is the minimum efficient scale: basically effieecent or equilibrium

Question 12

Explain why it is difficult to succeed at an integration strategy.

Answer 12

1. you have to balance trade offs in differentiation and low cost
2. you have parts in the chain that are fundamentally different from each other
3. you could get stuck in the middle and fail at both, getting competitive disadvantage

Question 13

cost/value drivers of integration strategy

Answer 13

leverage quality,economies of scope,innovation, firm structure, culture, routines

Question 14

trade offs between low cost and differentiation strategy settled at

Answer 14

business level or at corporate level

Question 15

Describe and evaluate the dynamics of competitive positioning.

Answer 15

1. positions change to adapt to environment
2. productivity frontier: what is the best practice at the time, with relationship of cost/value
3. not reach productivity means competitive disadvantage