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FORMULATION Competing in these markets via existing operations, diversification, repositioning, Decisions about what markets to compete in CORPORATE STRATEGY Competing by least cost, focus, differentiation Business Strategy Decisions about how to compete in each market

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Presentation Transcript
slide1

FORMULATION

Competing in these

markets via existing

operations, diversification, repositioning,

Decisions about

what markets to

compete in

CORPORATE

STRATEGY

Competing by

least cost, focus,

differentiation

Business

Strategy

Decisions about

how to compete

in each market

IMPLEMENTATION

Decisions about

the actions needed

within each

functional area

Carry out strategy

chosen for each

function

Functional

Strategy

slide3

Competitive Advantage Base

Lower Cost

Differentiation

Differentiation

COST

LEADRSHIP

Broad Target

Competitive Scope

Focused

Differentiation

Narrow Target

COST FOCUS

Michael Porter’s Generic Strategies

cost leadership
Skills & Resources

Sustained capital investment & access to capital

Process engineering skills

Intense supervision of labor

Products designed for ease of manufacture

Low-cost distribution

Organizational Req’s

Tight cost control

Frequent, detailed control reports

Structured organization & responsibilities

Incentives based on meeting strict quantitative targets

Cost Leadership
differentiation
Skills & Resources

Strong marketing abilities

Product engineering

Creative flair

Strong capability in basic research

Corporate reputation for quality

Strong cooperation from channels

Organizational Reqs.

Strong coordination among functions, esp. R&D, product development, & marketing

Subjective measurement & incentives

Amenities to attract highly skilled labor

Differentiation
slide6

Differentiation Position

Low

High

Cost and

Differentiation

Pure Cost

Low

Cost Position

No Competitive

Advantage

Pure

Differentiation

High