Business-Level Strategy. Chapter 5. Present By Group 4 Janaka Heenkenda Pgia 07-6944 Vipula Jayakody Pgia07-6886 Dilupi Lihinipita Pgia07-6937 A. Krishnakumar Pgia07-6948. Brief Content. Introduction Identify Strategic Business Units
Present By Group 4
A. Krishnakumar Pgia07-6948
If gov. Underpin best value in service
External Criteria :
Target same customer types through same channel facing similar competitors.
Internal Criteria : Strategic capability – Resources and CompetencesSimilar products/ build in similar technology and share similar resources and competencies.Means cost structure of the ‘units’ is similar
SBU is part of an organization for which there is a distinct external market for goods or services that is different from another SBU.
Each product and each geographical branch, Diversity of product
1: Likely to be segment specific.
2 : Risk of price war and low margins/need to be a 'cost leader'.
3 : Low cost base and reinvestment in low price and differentiation.
4: (a) Without a price premium:
perceived added value by user, yielding market share benefits.
(b)With a price premium:
perceived added value sufficient to bear price premium.
Perceived Product/ Service
5: Perceived added value to a 'particular segment' warranting a premium price.
6: Std Value/ Increased Price : Higher margins if competitors do not value follow/risk of losing market share.
7: Low Value/ Increased Price : Only feasible in a monopoly situation.
8: Low Value/ Std Price : Loss of market share.
P&S, Remarko, Fast food
Anchor, Raththi, Nespray, Highland, Lukspray
Jaguar, Mercedes, BMW
E.g. : Microsoft, IBM, Intel, Bata
Competitive strategies in hypercompetitive condition
Increased selling power
Increased baying power
Competitiveness might be improved by collaboration to achieve
Increased barrier to enter
Shared work with customer
Decreased risk of substitution
Entry to new market
A Prisoner’s Dilemma
Competitors don’t know each others strategy in a competitive move
R/L- both spending low-get mutual benefit
R/U & L/L- one take advantage over the other by spending more
L/U- both spend more but return is less
-Thing forwards and then reason backwards.
-Start by trying to think through the sequence of moves that competitors might make based on reasonable assumption about what that competitors desires as the outcome.
-Identifying dominant and Dominated strategies.
-The timing in strategic moves.
-The careful weighing of risk,
-Establishing credibility and commitment
-Innova’s dominant strategy is RD
-Dolla’s Dominated strategy is Finnance
e.g – instead of heavy marketing expenditure/ investment