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Building Competitive Advantage Through Business-Level Strategy

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Chapter # 5
Building Competitive Advantage Through Business-Level Strategy
Business Level Strategy
Is the objective of developing a firm specific business model that will allow a company to gain a competitive advantage over its rivals in a market or industry. The way that strategic managers define their company’s business is the first step in crafting business level strategy.
Customer Needs and Product Differentiation
Customer needs are desired, wants or cravings that can be satisfied by means of the attributes or characteristics of a product a good or service. Two factors determine which product a customer chooses to satisfy these needs: The price of the product and the way a product is diffetentiated from other products of its type.
Product differentiation is the process of designing products to satisfy customers needs. A company obtains a competitive advantage when it creates, designs, and supplies a product in a way that better satisfies customer needs than its rivals do and chooses the correct pricing option the one that results in the level of demand that optimizes profitability.
Customer Groups and Market Segmentation
Market Segmentation is the way a company decides to group customers, based on important differences in their needs or preferences, in order to gain a competitive advantage. One principal way of grouping customers and segmenting the market is by what customers are able and willing to pay for a particular product, the other principal method of segmenting customers is according to the specific kinds of need that is being satisfied by a particular product.
Market segmentation is an evolving, ongoing process that presents considerable opportunities for strategic managers.
Distinctive Competencies
The third issue in business level strategy is to decide which distinctive competencies to create and build to achieve a competitive advantage in

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