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BUSINESS LEVEL STRATEGY ANALYSIS. The Positioning Approach. Porter’s 5 Forces. Value Chain Analysis. The Generic Strategies. The Positioning Approach. The oldest approach to military strategy.

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business level strategy analysis
BUSINESS LEVEL STRATEGY ANALYSIS

The Positioning Approach.

  • Porter’s 5 Forces.
  • Value Chain Analysis.
  • The Generic Strategies.
the positioning approach
The Positioning Approach
  • The oldest approach to military strategy.
  • The newest of the three prescriptive approaches to strategy .
    • Design and Planning Approaches were explained in Chapter 3.
  • Focuses on how firms in a given context differ in product market positions compared to the competition.

80

premises of the positioning approach
Premises of The Positioning Approach
  • Strategy follows structure.
  • Looks at the groups of competitors in an industry.
  • Relies more heavily on calculation than the design or planning schools.
  • Places even more emphasis on the role of strategic planners.

81

porter s five forces analysis
Porter’s Five Forces Analysis

Breaking Apart Industry-Level Competition

87

the 6 barriers of entry
The 6 Barriers of Entry
  • Economies of Scale.
  • Product Differentiation.
  • Capital Requirements.
  • Cost Disadvantages Independent of Size.
  • Access to Distribution Channels.
  • Government Policy.

89

buyer power determinants
Buyer Power Determinants
  • Bargaining Leverage.
    • Buyer Concentration
    • Buyer Volume.
    • Buyer Switching Costs.
    • Buyer Information.
    • Ability to Integrate Backward.
    • Substitute Products.
    • Pull-Through.

90

buyer power determinants9
Buyer Power Determinants
  • Price Sensitivity.
    • Price/Total Purchases
    • Product Differences.
    • Brand Identity.
    • Impact on Quality/Performance.
    • Buyer Profits.
    • Decision-Maker’s Incentives.

90

supplier power determinants
Supplier Power Determinants
  • Differentiation of Inputs.
  • Switching Costs of Suppliers.
  • Presence of Substitute Products.
  • Supplier Concentration.
  • Importance of Volume to Supplier.
  • Cost Relative to Total Purchases in the Industry.
  • Impact of Inputs on Cost or Differentiation.

90

power of substitutes
Power of Substitutes
  • Relative Price Performance of Substitute.
  • Switching Costs.
  • Buyer Propensity to Substitute.

92

determinants of rivalry
Determinants of Rivalry
  • Industry Growth.
  • Fixed Costs/Value Added.
  • Intermittent Overcapacity.
  • Product Differences.
  • Brand Identity.
  • Switching Costs.
  • Concentration and Balance.
  • Informational Complexity.
  • Diversity of Competitors.
  • Corporate Stakes.
  • Exit Barriers.

92

slide16

Determinants of Rivalry

Competition is Everything!!!

  • Industry Growth.
  • Fixed Costs/Value Added.
  • Intermittent Overcapacity.
  • Product Differences.
  • Brand Identity.
  • Switching Costs.
  • Concentration and Balance.
  • Informational Complexity.
  • Diversity of Competitors.
  • Corporate Stakes.
  • Exit Barriers.
slide18

Value Chain Analysis

Margin

Inbound

Logistics

Outbound

Logistics

Marketing

& Sales

Service

Margin

Operations

Primary Activities

Figure 3

slide19

Value Chain Analysis

A

C

T

I

V

I

T

I

E

S

S

U

P

P

O

R

T

Procurement

Human Resource Management

Margin

Technology Development

Procurement

Inbound

Logistics

Outbound

Logistics

Marketing

& Sales

Service

Margin

Operations

Primary Activities

Figure 3

value chain analysis20
Value Chain Analysis
  • Importance of value-chain analysis is that it provides a framework for identifying or

developing a distinctive competence.

82

devising a plan of action
Devising a Plan of Action
  • Position the Company.
  • Influence the Balance of the Forces.
  • Anticipate Shifts in the Forces.

93

creating families of strategies
Creating Families of Strategies
  • .Locating the core business.
  • . Distinguishing the core business.
  • . Elaborating the core business.
  • . Extending the core business.
  • . Reconceiving the core business.

94

slide23

Creating Families of Strategies

  • .Locating the core business.
  • . Distinguishing the core business.
  • . Elaborating the core business.
  • . Extending the core business.
  • . Reconceiving the core business.

The Core Business is reflected in the

Choice of Generic Strategies

slide24

Porter’s Generic Strategies

Cost Advantage

Lower Cost

Differentiation

Broad

Target

1. Cost Leadership

Competitive

Scope

Narrow

Target

99

Figure 4

slide25

Porter’s Generic Strategies

Cost Advantage

Lower Cost

Differentiation

Broad

Target

1. Cost Leadership

2. Differentiation

Competitive

Scope

Narrow

Target

Figure 4

slide26

Porter’s Generic Strategies

Cost Advantage

Lower Cost

Differentiation

Broad

Target

1. Cost Leadership

2. Differentiation

Competitive

Scope

Narrow

Target

3A. Cost Focus

Figure 4

slide27

Porter’s Generic Strategies

Cost Advantage

Lower Cost

Differentiation

Broad

Target

1. Cost Leadership

2. Differentiation

Competitive

Scope

3B. Differentiation

Focus

Narrow

Target

3A. Cost Focus

Figure 4

strategies of differentiation
Strategies of Differentiation
  • Price Differentiation.
  • Image Differentiation.
  • Support Differentiation.
  • Quality Differentiation.
  • Design Differentiation.
  • Undifferentiation.

99

strategies of scope
Strategies of Scope
  • Unsegmentation.
  • Segmentation.
  • Niche.
  • Customizing.

100

elaborating the core business
Elaborating the Core Business
  • Penetration Strategies.
  • Market Development Strategies.
  • Geographic Expansion Strategies.
  • Product Development Strategies.

101

slide31

Elaborating the Core Business

  • Penetration Strategies.
  • Market Development Strategies.
  • Geographic Expansion Strategies.
  • Product Development Strategies.
ways to elaborate a given business
Ways to Elaborate a Given Business

Existing Product

New Product

Product

Development

Strategies

Penetration

Strategies

Existing

Market

Market

Development

Strategies

Diversification

Strategies

New

Market

Figure 5

101

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