Monday, 20 October 2014

What Have I Learned This Week part 6

Business Level Strategy

It is refer to strategies that business firms use to build competitive advantage and also used to help organizations establish a competitive advantage over industry rivals.

Introduces by Michael Porter with three generic business level strategies :

1 - cost leadership
produce a product or service at a cost below competitors can achieve. 
For example : MYDIN offered basic necessities products a lower cost compared to the competitors who offer same line products and services. 

2 - differentiation
provided to customers through unique features and characteristics of an organization's products rather than by the lowest price. this is done through high quality, features, high customer service, rapid product innovation, advanced technological features, image management, and etc.
For example : ROLEX offered a very high class swatch that present the standard of livings and lifestyle. 

3. focus strategy
based on the firm competing in a narrow scope within an industry where the firm selects a segment or group and tailors its strategy to serve them. use focused strategies may be able serve the smaller segment better than competitors who have a wider base of customers. this is especially true when special needs make it difficult for industry-wide competitors to serve the needs of this group of customers. By serving a segment that was previously poorly segmented an organization has unique capability to serve niche.
there are two variants : 
a) Focused Low Cost- Organizations not only compete on price, but also select a small segment of the market to provide goods and services to.
b) Focused Differentiation - Organizations not only compete based on differentiation, but also select a small segment of the market to provide goods and services. 
For example : UNIVERSAL TRAVELER, in Malaysia there are focusing on traveler attire for winter for those who plans to travel to overseas during winter seasons.

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