Business-level strategies

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Foundations of business strategies

Business strategies are the courses of action adopted by an organisation for each of its businesses separately to serve identified customer groups and provide value to the customer by satisfaction of their needs.

Corporate-level strategies lay down the framework in which business strategies operate.
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Choice of competitive strategy

Industry structure based on five competitive forces: the threat of new entrants;
the threat of substitute products or services; the bargaining power of suppliers; the bargaining power of buyers; and the rivalry among the existing competitors in an industry

Positioning

of firm in the industry

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Competitive advantage

Generic business strategies

COMPETITIVE SCOPE Broad target Cost leadership Differentiation

Narrow target

Focussed Cost leadership Low-cost products/services

Focussed differentiatio n Differentiated products/services

COMPETITIVE ADVANTAGE
Adapted from M.E. Porter: Competitive Advantage: Creating and Sustaining Superior Performance New York: Free Press, 1985, p. 12.

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Cost leadership business strategy

When

the competitive advantage of an

organisation lies in lower cost of products or services relative to what the competitors have to offer, it is termed as cost leadership.

e.g. Moser Baer, Reliance Communications

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Differentiation business strategy

When

the competitive advantage of an

organisation lies in special features incorporated into the product / service which is demanded by the customers who are willing to pay for it then the strategy adopted is the differentiation business strategy. e.g. Orient fans innovating and selling to Walmart Gati Insurance cover, Refund on 5/23/12

Focus business strategy

Focus

business strategies essentially rely on

either cost leadership or differentiation but cater to a narrow segment of the total market. e.g. Rapidex English speaking books
(Focussed Cost Leadership)

Tanishq (Focussed differentiation)

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Tactics for business strategies

Timing

tactics

First movers and late movers Advantages and disadvantages of being a first mover

Market

location tactics

Market leader Market challenger Market follower Market nichers

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Business strategies under different industry conditions

MARKET SIZE

Embryonic

Growth TIME

Maturity

Decline

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