Business-level strategies are concerned specifically with

Name: Class: Date:

Chapter 04: Business-Level Strategy

True / False

1. A business-level strategy is 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.

a. True

b. False

ANSWER: True

2. Every firm uses all levels of strategy: corporate-level, merger and acquisition, international, and cooperative.

a. True

b. False

ANSWER: False

3. When selecting a business-level strategy, the firm determines who will be served, what needs those target customers

have that it will satisfy, and how those needs will be satisfied.

a. True

b. False

ANSWER: True

4. Global competition has increased the options for consumers and has made it more imperative for firms to identify the

needs of customers to earn above-average returns.

a. True

b. False

ANSWER: True

5. Effective use of the generic business strategies allows a firm to favorably position itself relative to the five competitive

forces in the industry.

a. True

b. False

ANSWER: True

6. Almost any identifiable human or organizational characteristic can be used to subdivide a market into segments that

differ from one another on a given characteristic.

a. True

b. False

ANSWER: True

7. The generalized forms of value that goods and services provide are either low cost with acceptable features or highly

differentiated features with acceptable cost.

a. True

b. False

ANSWER: True

8. Changing consumer needs are illustrated by Starbucks' enabling consumers to have an experience and design their own

drinks rather than just a cup of coffee.

a. True

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Chapter 4:

Introduction

Strategy: Increasingly important to a firm’s success and concerned with making choices among two or more

alternatives.

Choices dictated by:

oExternal environment (Opportunities and Threats)

oInternal resources, capabilities and core competencies (Strengths and Weaknesses)

Business level-strategy - Integrated and coordinated set of commitments and actions the firm uses to gain a

competitive advantage by exploiting core competencies in a specific product markets or industry

Responsibility of business level managers

How a firm intends to compete in an individual product market or industry

All firms must develop and implement business level strategy

Single business firms compete in one industry and have one business level strategy

Multi-business firms compete in multiple industries and have a separate business level strategy for each

business unit or industry they compete in

Business level strategy must be consistent with the firms internal and external environments

Business-Level Strategies

Purpose: To create differences between position of a firm and its competitors (think strategic group map from

Module 3)

Firm must make a deliberate choice to:

oPerform activities differently (low cost)

oPerform different activities (differentiation)

Impacts how value chain activities will be performed to create unique value

No strategy better than others

Contingent on internal and external environment

Competitive Advantage and Scope

Two types of competitive advantage firms must choose between:

oHaving Lower Cost than rivals (performing activities differently)

oThe ability to Differentiate and command a premium price that exceeds the extra cost of doing so

(performing different activities)

Two types of competitive scope firms must choose between:

oBroad target - competing industry wide

oNarrow target - serving the needs of a narrow customer group

Five Business-Level Strategies

Competitive advantage and competitive scope combine to yield 5 Business-Level Strategies

These are the five strategic options that firms have for competing in a particular industry or product

market

Can potentially be used by any organization competing in any industry

None is inherently or universally superior to the other

Choice is contingent on the firms internal and external environment

Cost Leadership Strategy

What are the 3 business level strategies?

What are business level strategies also known as?

What are the 5 business level strategies?

What is a business level strategy quizlet?