Faculty Development Programme

Branch MBA
Subject :Corporate strategy
Subject Code : 576411(76)
Semester – 4th

Presented By:
Parmeet Singh Bagga
Asstt. Professor,
Department of Business Administration
Business-Level Strategy
Business-level strategy: an
integrated and coordinated set of
commitments and actions the firm
uses to gain a competitive
advantage by exploiting core
competencies in specific product
markets

2
Core Competencies and
Strategy
The resources and capabilities that have
Core been determined to be a source of
competencies competitive advantage for a firm over its
rivals

An integrated and coordinated set of

Strategy actions taken to exploit core competencies
and gain a competitive advantage

Actions taken to provide value to customers

Business-level and gain a competitive advantage by
strategy exploiting core competencies in specific,
individual product markets
3
Strategy
Fundamental constraints
 Scope
 What good or service to offer, to which
customers
 Value chain
 How and where to create the good or service
 How to distribute the good or service in the
marketplace(s)

4
Cost Leadership Strategy
An integrated set of actions designed to
produce or deliver goods or services at the
lowest cost relative to competitors with
features that are acceptable to customers
 relatively standardized products
 features acceptable to many customers
 lowest competitive price

5
Value-Chain example:
Cost Leader
6
Differentiation
Strategy
An integrated set of actions designed by a
firm to produce or deliver goods or services
that customers perceive as adding
value
 price may exceed what the firm’s target
customers are willing to pay
 Non-commodity products
 customers value differentiated features more
than they value low cost

7
Differentiation
Strategy
 Add downstream value
 lower buyer cost
 raise buyer performance
 Cost
 Add value to buyer’s value: reduce downstream
processing time, search time, transaction costs,
defect rates, direct costs, learning curves,
labor, space, installation, etc. (e.g., CRM
software)

8
 Differentiation and the
Five Forces
• Rivalry - brand loyalty to differentiated
products reduces price competition
• Buyers – differentiated products less price
elastic
• Suppliers – absorb price increases (higher
margins), pass along higher prices (buyer
loyalty)
• Entrants – must surpass proven products or
be equivalent at lower price
• Substitutes – diff raises switching costs
9
 Thank you

Any queries