Business-Level Strategy
¨Business-level strategies represent plans or methods companies use to conduct various functions in their business operations¨(Vitez,n.d.).

Market segmentation
Group customers based on important differences in their needs

Low cost and differentiation

Low cost: 💰 📈
profit, undercut rivals on price, gain market share

Differentiation: distinguishing from rivals.

  1. To charge a premium price ⬆💸
  2. To grow demand and capture market share ⤴ 📊

The Differentiation-Low cost tradeoff

  • Efficiency frontier: different positions a company can adopt if they have enough demand to support an offering 👥
  • Right business and functional-level strategies ✅ ✔

Value innovation: greater value, lower cost

Industry and competitive advantage

Implementing business-level strategy

Competing differently

Business-level strategies

different product offerings for the different segments

To target a limited number of market segments

Produce and sell standardized product

  1. Standardization strategy: lower costs, economies of scale, incremental revenues
  1. Segmentation strategy: customize its product to different segments, multiple offerings
  1. Focus strategy: higher cost structure

Generic business-level

Broad differentiation

Focus low-cost

Focus differentiation

Broad low-cost

A well-chosen and well-crafted business-level strategy = Advantageous position relative to each of the competitive forces 👍🏻 🏁

  • Actions functional level support the business-level strategy

Lowering costs through functional strategy and organization:

  1. Economies of scale and learning effects 🤓 ⚽⚽
  2. Lean production and flexible manufacturing tech 🛠 ⛑ 🗜
  3. Quality mythologies 🔀
  4. Information systems 💻
  5. JIT inventory control ⏲
  6. Designing at low cost ✏
  7. Steps for customer retention ⭐

Differentiation through fictional -level strategy and organization

  1. Customization and mkt mix 💁🏻
  2. Designing product high quality
    ♻ ✏
  3. Customer care function 💅 ❤
  4. Brand Building ®
  5. Hiring and employee strategies 👷

-Search for a ¨blue ocean¨
-A wide open market space where a company can chart its own course.
-Shifts the basis of competition

Vitez, O. (n.d.). Five Types of Business-Level Strategies.Recuperado de http://smallbusiness.chron.com/five-types-business-level-strategies-781.html