1、Part 2 Strategy Formulation6-2Define business-level strategy and describe how it determines a firms strategic position.LO 6-2 Examine the relationship between value drivers and differentiation strategy.LO 6-3Examine the relationship between cost drivers and cost-leadership strategy.LO 6-4Assess the
2、benefits and risks of cost-leadership and differentiation business strategies vis-vis the five forces that shape competition.LO 6-5Explain why it is difficult to succeed at an integration strategy.LO 6-6Evaluate value and cost drivers that may allow a firm to pursue an integration strategy.LO 6-7Des
3、cribe and evaluate the dynamics of competitive positioning.6-3ChapterCase 6 Trimming Fat at Whole Foods Market6-4ChapterCase 6 6-56-6Industry and Firm Effects Jointly Determine Competitive Advantage6-7Strategic Position6-8Strategic Trade-offs6-9Generic Business Strategies6-10Strategic Position and C
4、ompetitive Scope:Generic Business Strategies6-116-12LO 6-1 Define business-level strategy and describe how it determines a firms strategic position.Examine the relationship between value drivers and differentiation strategy.Examine the relationship between cost drivers and cost-leadership strategy.L
5、O 6-4Assess the benefits and risks of cost-leadership and differentiation business strategies vis-vis the five forces that shape competition.LO 6-5Explain why it is difficult to succeed at an integration strategy.LO 6-6Evaluate value and cost drivers that may allow a firm to pursue an integration st
6、rategy.LO 6-7Describe and evaluate the dynamics of competitive positioning.6-13Value Drivers6-14Value Drivers:Differentiation6-15116STRATEGY HIGHLIGHT 6.1Toyota:From“Perfect Recall”to“Recall Nightmare”6-16Cost Drivers:Cost-Leadership6-17118STRATEGY HIGHLIGHT 6.2Ryanair:Lower Cost than the Low-Cost L
7、eader!6-18Ryanair Sample Revenue Calculation 6-19Small Group Exercise Ryanair6-20Cost Drivers:Inputs&Scale6-21Economies and Diseconomies of Scale6-22Economies of Scale and Diseconomies of Scale6-23Big Box Retailers Advantage 6-24Cost Drivers:Learning&Experience Curves6-25The Learning Curve6-26Gainin
8、g Competitive Advantage Through Learning and Experience Curves6-27Define business-level strategy and describe how it determines a firms strategic position.LO 6-2 Examine the relationship between value drivers and differentiation strategy.LO 6-3Examine the relationship between cost drivers and cost-l
9、eadership strategy.LO 6-4Assess the benefits and risks of cost-leadership and differentiation business strategies vis-vis the five forces that shape competition.LO 6-5Explain why it is difficult to succeed at an integration strategy.LO 6-6Evaluate value and cost drivers that may allow a firm to purs
10、ue an integration strategy.LO 6-7Describe and evaluate the dynamics of competitive positioning.6-28EXHIBIT 6.7 Competitive Positioning and the Five Forces6-29LO 6-1 Define business-level strategy and describe how it determines a firms strategic position.Examine the relationship between value drivers
11、 and differentiation strategy.Examine the relationship between cost drivers and cost-leadership strategy.LO 6-4Assess the benefits and risks of cost-leadership and differentiation business strategies vis-vis the five forces that shape competition.LO 6-5Explain why it is difficult to succeed at an in
12、tegration strategy.LO 6-6Evaluate value and cost drivers that may allow a firm to pursue an integration strategy.LO 6-7Describe and evaluate the dynamics of competitive positioning.6-306-316-32EXHIBIT 6.9Value and Cost Drivers6-33Integration Strategy Corporate Level6-34Define business-level strategy
13、 and describe how it determines a firms strategic position.LO 6-2 Examine the relationship between value drivers and differentiation strategy.LO 6-3Examine the relationship between cost drivers and cost-leadership strategy.LO 6-4Assess the benefits and risks of cost-leadership and differentiation bu
14、siness strategies vis-vis the five forces that shape competition.LO 6-5Explain why it is difficult to succeed at an integration strategy.LO 6-6Evaluate value and cost drivers that may allow a firm to pursue an integration strategy.LO 6-7Describe and evaluate the dynamics of competitive positioning.6
15、-35THE DYNAMICS OF COMPETITIVE POSITIONING6-36The Dynamics of Competitive Positioning:Apple,HP,and Dell6-37CHAPTERCASE 6 Consider This1.What value drivers is Whole Foods using to remain differentiated in the face of Walmart and others now selling organic foods?2.Given the discussion in the ChapterCa
16、se about Whole Foods trimming its cost structure,does the firm risk being“stuck in the middle”?Why or why not?3.What other methods could Whole Foods use to successfully drive its business strategy?Whole Foods John Mackey Video6-38LO 6-1Define business-level strategy and describe how it determines a
17、firms strategic position.Business-level strategy determines a firms strategic position in its quest for competitive advantage in a single industry or product market.Strategic positioning requires that managers address strategic trade-offs that arise between value and cost,because higher value tends
18、to go along with higher cost.Differentiation and cost leadership are distinct strategic positions.Besides selecting an appropriate strategic position,managers must also define the scope of competitionwhether to pursue a specific market niche or go after the broader market.LO 6-2Examine the relations
19、hip between value drivers and differentiation strategy.The goal of a differentiation strategy is to increase the perceived value of goods and services so that customers will pay a higher price for additional features.6-39 In a differentiation strategy,the focus of competition is on non-price attribu
20、tes.Some of the unique value drivers managers can manipulate are product features,customer service,customization,and complements.Value drivers contribute to competitive advantage only if their increase in value creation(V)exceeds the increase in costs(C).LO 6-3Examine the relationship between cost d
21、rivers and cost-leadership strategy.The goal of a cost-leadership strategy is to reduce the firms cost below that of its competitors.In a cost-leadership strategy the goal is to reduce the firms costs below that of its competitors.The focus is on lowest-possible price with acceptable quality.Some of
22、 the unique cost drivers that managers can manipulate are the cost of input factors,economies of scale,and learning-and experience-curve effects.No matter how low the price,if there is no acceptable value proposition,the product or service will not sell.6-40LO 6-4 Assess the benefits and risks of co
23、st-leadership and differentiation business strategies vis-vis the five forces that shape competition.The five forces model helps managers use generic business strategies to protect themselves against the industry forces that drive down profitability.Differentiation and cost-leadership strategies all
24、ow firms to carve out strong strategic positions,not only to protect themselves against the five forces,but also to benefit from them in their quest for competitive advantage.Exhibit 6.7 lists benefits and risks of each business strategy.6-41LO 6-5Explain why it is difficult to succeed at an integra
25、tion strategy.A successful integration strategy requires that trade-offs between differentiation and low cost be reconciled.Integration strategy often is difficult because the two distinct strategic positions require internal value chain activities that are fundamentally different from one another.W
26、hen firms fail to resolve strategic trade-offs between differentiation and cost,they end up being stuck in the middle.They then succeed at neither strategy,leading to a competitive disadvantage.LO 6-6Evaluate value and cost drivers that may allow a firm to pursue an integration strategy.To address t
27、he trade-offs between differentiation and cost leadership at the business level,managers may leverage quality,economies of scope,innovation,and the firms structure,culture,and routines.The trade-offs between differentiation and low cost can either be addressed at the business level or at the corpora
28、te level.6-42LO 6-7Describe and evaluate the dynamics of competitive positioning.Strategic positions need to change over time as the environment changes.Best practices determine the productivity frontier at any given time.Reaching the productivity frontier enhances the likelihood of obtaining a comp
29、etitive advantage.Not reaching the productivity frontier implies competitive disadvantage if other firms are positioned at the productivity frontier.6-43 Ambidextrous organization Business-level strategy Conglomerate Cost-leadership strategy Differentiation strategy Diseconomies of scale Economies of scale Economies of scope Focused cost-leadership strategy Focused differentiation strategy Integration strategy Mass customization Minimum efficient scale(MES)Productivity frontier Scope of competition Strategic position Strategic trade-offs6-44
