“Business-Level Strategy” Please respond to the following:From the first e-Activity, assess your satisfaction with the company you researched and make recommendations about how that company could modify its business-level strategy to both increase your overall level of satisfaction and to attract new customers. Provide specific examples to support your response.Analyze the five business-level strategies discussed in Chapter 4 to determine which strategy the company you researched most likely applies. Determine how your experience with that company might change if it switched to one of the other four strategies (your choice). Explain your rationale.Week 4 eActivitiesUse the Internet or the Strayer Library to research a company with which you regularly do business or are a regular customer. Focus on how that company relates to their customers. Be prepared to discuss.     Use the Internet or the Strayer Library to research Apple’s strategy for competing against other technology companies. Be prepared to discuss.Business Administration
Business-Level Strategy, Competitive Rivalry, and
Competitive Dynamics
• Upon completion of this lesson, you will be
able to:
– Identify various levels and types of strategy in
a firm
Supporting Topics
• Customers: Their Relationship with Business-level
• The Purpose of a Business-level Strategy
• Types of Business-level Strategies
• A Model of Competitive Rivalry
• Competitor Analysis
• Drivers of Competitive Actions and Responses
• Competitive Rivalry
• Likelihood of Attack
• Likelihood of Response
• Competitive Dynamics
Customer Relationships
• Strategic Competitiveness
– Effectively managing relationships with
• Firm’s Relationships
– Strong and interactive
• Reach, Richness, and Affiliation
• Determining the Customers to Serve
– Market segmentation
Customer Relationships, continued
• Who to Serve
– Determining which customer needs to satisfy
• Core Competencies
– Necessary to satisfy customer needs
Purpose of a Business-Level Startegy
• Create differences between the firm’s
position and those of its competitors
– Perform activities differently
– Perform different activities
• Activity Maps
Types of Business-Level Strategies
Competitive Advantage
Cost Leadership
Integrated Cost
Focused Cost
Focused Differentiation
Cost Leadership
• Acceptable to customers at the lowest cost
• Competitive levels of quality that create
value for customers
Differentiation Strategy
• Different in ways important to the
• Firms must reduce upward pressure
• Thorough understanding of what the
customer values
– Relative importance of satisfaction of needs
– What customers are willing to pay as premium
Focus Strategies
• Specific Market Segments
– Particular buyer group
– Different segment or product line
– Different geographic market
• What is a Focus Strategy
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Competitor Rivalry
Competitive Behavior
Multimarket Competition
Competitive Dynamics
Likelihood of
Likelihood of
Interfirm Rivalry
Drivers of Competitive
Competitive Analysis
A Model of Competitive Rivalry
Competitor Analysis
• Definition
– It is the first step the firm takes to be able to
predict the extent and nature of its rivalry with
each competitor.
• How is it Determined
– Market commonality
– Resource similarity
Market Commonality
• Competitors come into contact with each
other several times
• Multimarket Competition
• Potential to Respond
Resource Similarity
• Tangible and intangible resources are
– Type
– Amount
• Competitor Analysis
– Analysis of competitors
• Market commonality
• Resource similarity
Drivers of Competitive Actions
• Awareness
• Motivation
• Ability
Strategic and Tactical Actions

Competitive Action
Competitive Response
Strategic Action or a Strategic Response
Tactical Action or a Tactical Response
Likelihood of Attack
• First-Mover Incentives
– Earning above-average returns
– Gaining loyalty of customers
– Gaining market share
• Organizational Size
• Quality
Likelihood of Attack, continued
• First-Mover incentives
• Organizational Size
– Types and timing of actions
• Quality
– Can predict declines in sales
• Products that are poor in quality
Likelihood of Response
• Type of Competitive Action
• Reputation
• Market Dependence
Competitive Dynamics
• Slow-Cycle Markets
• Fast-Cycle Markets
• Standard-Cycle Markets
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Customer Relationships
The Purpose of a Business-Level Strategy
Types of Business-Level Strategies
A Model of Competitive Rivalry
Competitive Dynamics

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