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[BS-4] Strategic Positioning and Strategic Renewal, How to produce…
[BS-4] Strategic Positioning and
Strategic Renewal
Generic Business Strategies
Why
strategic fit
To choose and implement a strategy that can bridge the firm's
internal attributes
and its
external environment.
two main generic business strategies
cost leadership
emphasizes
cost control
in order to generate economic value added and profits.
similar to its competitors but at a
lower cost.
Examples
Walmart, Carrefour, Metro
broad cost leadership
narrow or focus low cost
some business may not have significant scale economic to begin with
avoid some customer segments that are too costly to serve
Checkers or Rallys
2 more items...
IKEA do not want the customers who need to pre-assemble
that can help firms in pursuing a cost leadership strategy
differentiation advantage
emphasizes
value creation
for customers, and produces higher producer surplus and profits in that way.
unique and different from competitors, and can therefore
command a price premium.
Examples
Nordstrom and Bloomingdale's
broad differentiation
narrow scope and differentiation
Luxury goods
Prada, Lamborghini, Rolex,
more focus helps promote the aura of exclusivity around the product
making them more valuable to customers
target at a narrower market segment and limited distribution channels
Dual Strategies
integrated strategies
integrated some element of cost reduction &
some element of differentiation
Traditional
company should make a choice
cost leadership
differentiation advantage
Both = Stuck in the middle
consider a bad thing for strategic positioning
Advantage
May be a siginificant opporunity
Many companies have already adopt cost leadership or differentiation
Dual strategy may have the opporunities that others didn't find
How to
AVOID
being stuck in the midddle?
Manage cost-differentation trade-off
Siginification managerial innovation
Fundamentally different business model
Requires clear
disciplined strategy
communication about strategy itself &
dogged discipline in implementing it
Strategic
Positioning
Ex. Fieldglass
They were never be the
lowest price provider.
Value Position
for Customers
They didn't get involved
in a feature war.
Transparency and
clarity of product
Ease to
utilize
Customer service
and orientation
Broad net
platform
Wide range of
satisfaction
Compare with others
Others would like to
attract cumstomers.
The lower price
is much better.
VMS be taken
so seriosly.
Vendor Management System
decrease
the cost
Companies use cloud technology
to manage production lines.
The feature
war happens.
The Manager’s Advice
Making a few critical decisions at the right time
Tactical plan
Be a great listener and understand your people
Continually thirst to be acquisitive about things
Know yourself
Admit when you are wrong
Strategic Renewal
Example : Circuit City
Performed exceptionally well
Store customer service
Leading edge logistics
Assortment of products
Reason of Filed
High Competitive
Walmart ,Amazon
Unable to adapt strategy
Bought back shares to boost its stock price
replaced talented salespeople with low-paid employees
Dynamic capabilities
described as capabilities that enable companies to change their resource or capability base
New product development
Alliances
Acquisitions
Business development
3-P framework
Positions
Resource posts that can be used similarly
Paths
Strategic options before the company
Processes
Good activity and routine
Example
Soccer game
The ball in a good position , an advantage with more forwards
Short pass, as well as a long one, maybe even a direct shot at goal.
Practice set pieces and moves together
How to produce competitive advantage
what drives
costs
or
customer value
in a particular business
how the company’s
value chain
can be modified, enhanced and applied to these cost or value drivers.
Examples
cost leadership
Walmart reduces costs
developing strong supplier relationships
utilizing a great procurement capability
building key resources
a network of warehouses, a fleet of trucks, IT system for managing the logistics
differentiation advantage
Starbucks coffee's
customization
investment in equipment
recruitment and training of their staff
complements
Apple iPod
iTunes store.
Company’s development and own sources misalignments
losing strategic alignment