Strategic Choices: Business-Level Strategy
Strategic Choices:Business-Level Strategy Strategic Management (5 ECTS) Ismo Vuorinen Principal Lecturer Autumn 201023.11.20101
Strategic Choices23.11.20102
The TOWS Matrix23.11.20103
Business-Level Strategies23.11.20104
What is aStrategic Business Area? Demand Demand potential (size, growth rate, market share)Customers Customer potential customer structure, buying motives andcriteria)Competition Structure of the competition, the competitors' objectives andstrategies, competitive position Specific resources and competences (the strategic capabilities) Organisation structure, control systems, technology,resources, know-how, management method, organisationalculture Success factors (on the basis of the previous factors)23.11.20105
What is aStrategic Business Unit?A strategic business unit (SBU)is a part of an organisation for whichthere is a distinct external market forgoods or services that is differentfrom another SBU Each SBU has its own business strategy23.11.20106
The Strategy Clock23.11.20107
Route 1: No Frills Strategy Low price combined with low perceivedproduct benefits focusing on price-sensitivemarket segments Commodity marketsPrice-sensitive customersHigh power, low switching costs among buyersOpportunity to avoid major competitors23.11.20108
Route 2: Low-Price Strategy Lower price than competitors while offeringsimilar product benefitsPitfalls Margin reductions Inability to reinvest23.11.20109
Route 3: Hybrid Strategy Seeks to simultaneously achievedifferentiation and low price relative tocompetitorsAdvantageous when Greater volumes can be achievedCost reductions outside differentiated activities areavailableUsed as an entry strategy23.11.201010
Route 4: DifferentiationStrategy Seeks to provide products that offer benefitsthat differ from those offered by competitorsDependent upon Identifying and understanding strategiccustomer needs Identifying key competitors’ strategies23.11.201011
Route 5: FocusedDifferentiation Seeks to provide high perceived product benefits,justifying price premiumsKey issues Choice between focus strategy and broaddifferentiation Tensions between focus strategy and otherstrategies Market changes23.11.201012
Routes 6-8: Failure Strategies 6 – Increase prices without increasingservice/product benefits7 – Reduction in product/service benefitswith increase in relative price8 – Reduction in benefits whilst maintainingprice23.11.201013
Sustaining 201014
Achieving Low PricesOperate with lowermarginsDevelop a uniquecost structureCreate efficiency inorganisationalcapabilitiesFocus on marketsegments withlow expectations23.11.201015
Ryanair23.11.201016
Dangers of Low PriceStrategies Competitors might follow suitCustomers associate low price with lowbenefitsCost reductions may result in inability topursue differentiation strategy23.11.201017
Ways of attempting to SustainAdvantage through DifferentiationCreate difficultiesof imitationCreate a situationof imperfect mobilityEstablish a lowercost position23.11.201018
Establishing Strategic Lock-InSize or gcommitmentInsistence onpreservationof position23.11.201019
Competitive Strategiesin Hypercompetitive Conditions23.11.201020
Competition and Collaboration23.11.201021
Business-Level Strategies 23.11.2010 4. What is a Strategic Business Area? Demand Demand potential (size, growth rate, market share) Customers Customer potential customer structure, buying motives and criteria) Competition Structure of the competition, the competitors' objectives and strategies, competitive position Specific resources and competences (the strategic capabilities) Organisation .
Unit-V Generic competitive strategy:- Generic vs. competitive strategy, the five generic competitive strategy, competitive marketing strategy option, offensive vs. defensive strategy, Corporate strategy:- Concept of corporate strategy , offensive strategy, defensive strategy, scope and significance of corporate strategy
Organization chart showing corporate, strategic business unit & functional strategies. Competitors who seemed to be more flexible and entrepreneurial. One consequence was the devolution of responsibility for competitive strategy to strategic business units (S.B.U.). Corporate center of Strategic business unit Strategic business unit Strategic
reinforce business strategy by offering specially designed strategic IT services. Finally the thesis aims at studying various similarities and differences concerning case companies comprehension of strategic themes related to IT strategy. 1.1 Purpose of the study (((((. Strategy (case. (((( business strategy. .
1.2.2 The purpose of strategy-, mission, vision, values and objectives 7 1.2.3 Strategy statements 8 1.2.4 Levels of strategy 10 1.3 The Exploring Strategy Framework 11 1.3.1 Strategie position 12 1.3.2 Strategie choices 13 1.3.3 Strategy in action 14 1.4 Working with strategy 16 1.5 Studying strategy
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The Strategic Management Process 15 Developing a Strategic Vision: Stage 1 of the Strategic Management Process: 17 How a Strategic Vision Differs from a Mission Statement 19 The Importance of Communicating the Strategic Vision 22 The Benefits of an Effective Strategic Vision 22 Setting Objectives: Stage 2 of the Strategic Management Process 22 xxiv
1. 4 Tools for strategic analysis 1. 4a SWOT 1. 4b TOWS 1. 4c Hambrick Model: Strategy Diamond 1. 4d BCG matrix 1. 4e General Electrics Stoplight Matrix 1. 4f Balance score card . 3 Management Strategic Management Strategic Analysis 1. 5 Summary 1.2 Introduction Strategic Management is the process of strategic decision-making that sets the long .
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