Chapter 4 Flashcards
What is a business-level strategy?
- Integrated and coordinated set of commitments and actions a firm uses to gain a competitive advantage
- Five business-level strategy: cost leadership, differentiation, focused cost-leadership, focused differentiation, integrated cost leadership
Cost Leadership differentiation?
Competitive advantage can be achieved through this strategy
• Low cost products must be offered with competitive levels of differentiation
• Low costs products with a range of differentiation
Standardised goods
Focused cost leadership?
offering standardized products for the industry
Need to differentiate the products from the competitors
IKEA e.g. has low cost products and targest many younger people and offers also some differentiated productsn (unique furniture, playrroms for children) customers: young (design of IKEA is good), not wealthy (cheap furniture), come late (IKEA opens till late)
focused differentiation strategy?
Products have different features –> selling them for a premium price (luxury segment e.g. Pandora)
- try to differentiate from other companies
- Settled in a narrow market
(e. g. Lord of the fries –> differentiate by quality of food and have young customers presenting their advertisment on Facebook etc.)
integrated cost leadership/differentiation business level strategy?
offering low cost products that have valued differentiated features
Flexibility is very important
e.g. Zara usescost leadership differentiation –> faschion for a low price with different clothes every three weeks)
Demand is there
