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Business level strategy - Coggle Diagram
Business level strategy
Defenition
Strategy at business unit level is concerned with competing successfully in individual markets.
"How do we win in this market?"
This trategy needs to be linked to the objecttives indentifined in the corporate level strategy.
Porter’s Generic Strategies
Differentiation strategy
Firms that successfully implement a differentiation strategy are able to charge more than competitors because customers are willing to pay more to obtain the extra value they perceive
An organization that pursues a differentiation strategy seeks to distinguish itself from competitors through the quality (broadly defined) of its products or services.
Overall cost leadership strategy
attempts to gain a competitive advantage by reducing its costs below the costs of competing firms.
the organization is able to sell its products at low prices and still
make a profit.
Focus strategy
Concentrates on a specific regional market, product line, or group of buyers
This strategy may have either a differentiation focus, whereby the firm differentiates its products in the focus market, or an overall cost leadership focus, whereby the firm manufactures and sells its products at low cost in the focus market
the Product Life Cycle
The product life cycle is a model that shows how sales
volume changes over the life of products.
the framework of the product life cycle
introduction
Demand may be very high and sometimes
outpaces the firm’s ability to supply the product
Managers need to focus their efforts on “getting product out the door” without sacrificing quality
growth
More firms begin producing the product, and sales continue
to grow
Important management issues include ensuring quality and delivery and beginning to differentiate an organization’s product from competitors’ products
May threaten an organization’s competitive advantage; thus, strategies to slow the entry of competitors are important.
maturity
Overall demand growth for a product begins to slow down, and the number of new firms producing the product begin to decline
The number of established firms producing the product may also begin to decline
decline—to plot strategy
Demand for the product or technology decreases, the number of
organizations producing the product drops, and total sales drop
Demand often declines because all those who were interested in purchasing a particular product have already done so.