Business Level Strategy

Business Level Strategy

Lecture Week 7!
Business Level Strategy!

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Learning Outcomes – Week 7!
Be able to! •  Identify Strategic Business units in Organisations! •  Explain the different bases of achieving competitive advantage! •  Explain the factors influencing the sustainability of competitive advantage! •  Explain the relationship between competition and collaboration !
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Strategic Choices !

Exhibit III.1!
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Business Level Strategy - Outline!
•  Strategic business units! •  Competitive advantage (strategy clock)!
–  Price-based! –  Differentiation! –  Hybrid and focus!

•  Sustainability of competitive advantage! •  Co-operation and competition! •  Game theory in competitive strategy!
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Business Level Strategies!

Exhibit 5.1!
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Strategic Business Units!
A strategic business unit is a part of an organisation! for which there is a distinct external market for
 goods or services that is different from another SBU!

•  Opposing pitfalls in identifying SBUs!
–  Too many different products/markets means lack of focus! –  Too few means not reflecting diversity of products/markets!

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Criteria for Identifying SBUs!
External! Same customer types! Same channels! Similar competitors! Internal! Similar products/ services! Similar technologies! Similar resources and competences!

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Bases of Competitive Advantage!
•  Competitive strategy!
–  The bases for achieving competitive advantage ! –  The bases for providing best value!

•  Porterʼs generic strategies!
–  Cost leadership! –  Differentiation ! –  Focus!

•  Bowman and DʼAveniʼs market facing strategies!
–  Provide customer needs better or more effectively than competitors! –  The strategy clock!
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The Strategy Clock!

Note: The strategy clock is adapted from the work of Cliff Bowman (see D. Faulkner and C. Bowman, The Essence of Competitive Strategy, Prentice Hall, 1995.) However, Bowman uses the dimenstion Perceived Use Value .!...

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