Professional Documents
Culture Documents
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Strategic Management Group Presentation:
Weightage 15%
Tentative Date: 19th September onwards If this is the scheduled date, then you
will have to send a soft copy of your slides a day prior (or before) this date
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Business Level Strategies:
The word generic or Porter's generic strategies can be used for any company
in any sector - Hence, the word generic is used for these strategies
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Business Level Strategies:
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Business Level Strategies:
Reach:
This parameter becomes very important if the company is targeting an industry like
social networking
Telecommunication: Bharti Airtel and Reach - This can be understood from the point of
their subscriber base
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Business Level Strategies:
Richness:
Again an example about this can be Amazon - The company launched a contest known
as "Your Amazon Ad Contest" wherein the customers were asked to make
advertisement for Amazon
This kind of contests / approaches depict that the company follows customer-centric
business strategy
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Business Level Strategies:
Affiliation:
Can be done very easily using an online medium - For instance, using internet
navigators
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Business Level Strategies Who, What and How:
Who:
Market segmentation - Dividing customers into groups based upon age, income,
geography (urban or rural), gender, etc.
Our case on Bajaj Auto was targeted at young men - Example, Bajaj Pulsar
Another example can be Arihant Retail of Chennai engaged in textiles and garments -
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Business Level Strategies Who, What and How:
What:
Do customers want low cost with acceptable features or highly differentiated features
with acceptable cost
Customers purchase goods that create value for them - Do companies create value at
times of economic austerity?
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Business Level Strategies Who, What and How:
What:
The company only provides fresh and high-quality food items - So as to provide
fresh food to its customers, the company donates its leftovers everyday
Because of this practice, no doubt the company is bearing a cost - But this is
outweighed by queues of customers waiting for fresh food
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Business Level Strategies Who, What and How:
Example: ProEnergy Services (US company) operating in the Energy industry gives
topmost priority to superior client satisfaction
Example: SAS (Statistical Analysis System) - Leader in business intelligence and analytics
Core competence for SAS is superior R&D - No competitor can match SAS with
regard to its R&D
Companies also try to understand how their current core competences can be used
for other product markets
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Business Level Strategies:
Understand this in the context of value chain, the company has to decide whether it
intends to perform activities differently or to perform different activities
In other words, how the company is planning to create value in their different primary
and support activities
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Business Level Strategies:
Six core strategic themes and linkages of different activities with these themes
Limited
Passenger
Service
Frequent
Reliable Connecting Precise routes
Departures dots or
activities
Highly
Very low
productive High Aircraft ticket price
ground crews Utilisation
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Business Level Strategies:
It is said that when companies are able to achieve the best alignment of their activities,
Strategic Fit is achieved
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Business Level Strategies:
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Business Level Strategies:
Competitive Scope:
Business-level strategies are formulated as per the different competitive scopes - Broad
target market and Narrow target market
Narrow target market - This involves specific consumer groups - Buyers with specific
needs or for buyers of specific geographies
Hybrid Strategy:
Integrated cost leadership / differentiation strategy
Note: None of the five strategies are superior than the other - The applicability of any strategy
is contingent to the external and internal environment within which a company operates
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Business Level Strategies:
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Business Level Strategies:
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Business Level Strategies:
Attract new customers - these customers were accustomed to planes and trains - Also
used to Internet access and comfortable seats
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Business Level Strategies:
Note: Cost-leadership strategy can work out positively for a company if primary activities are
able to create more value with lower costs
Inbound and Outbound logistics become very important for a retailer following cost
leadership - For instance, Walmart
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Business Level Strategies:
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Business Level Strategies:
Differentiation Strategy:
This strategy is all about Product Innovation A new product or service is provided by
a company
The company adopts this strategy because it knows that the customers are able to
understand the value that the differentiated good / service provides to them
The customers are price insensitive
Note:This is a sweet spot that the companies are looking for but finding this spot is difficult
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Business Level Strategies:
Differentiation Strategy:
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Business Level Strategies:
Differentiation Strategy:
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Business Level Strategies:
Differentiation Strategy:
Note:The scope of differentiation is vast whereas the scope of cost reduction is finite Beyond
a limit, no company can cut costs
A huge gap between the price of differentiators product and cost leaders product
By following differentiation strategy, the company should make sure that
upgradation of differentiated features takes place without drastic cost hike
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Business Level Strategies:
This is like a catch 22 situation The company should guard its luxury image but
at the same time cannot escape the need to reconsider its price strategy
If generic goods are providing a positive experience to a large consumer base Why
would the customers prefer differentiated goods?
Example: For instance, Kleenex facial tissues provide a lesser degree of positive
experience when compared to generic tissues
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Business Level Strategies:
Focus Strategies:
These strategies are apt for situations when the company is intending to cater to the
needs of a particular competitive segment In other words, the company is targeting a
niche
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Business Level Strategies:
Focus Strategies:
The broad-based companies prefer not to indulge their resources in such specific
segments or such specialised segments
This open-field or niche thus becomes attractive for specialised companies
For instance: Assisted living equipment for senior people like staircase lifts, mobility
scooters, etc.
MTR and Haldiram engaging in niche segments of food sector of countries like the US
and the UK Their local companies would not be interested in serving such a specific
consumer base
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Business Level Strategies:
Operating in narrow markets using a focused cost leadership strategy The emphasis of
the company is primarily on cost reduction
By following this strategy, the companies themselves decide the kind of customers they
want to attract In other words, defining their boundaries for customers that are not
required
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Business Level Strategies:
Narrow market becomes a broad market It could be a scenario that the specialised
needs get converted into generic needs
If this is a case, then the competitive scope expands and the market can no more
remain niche
Example: There was a time in India when assembled computers were sold The niche
players could no longer remain in the market with the onset of branded computers that
gradually became cheaper for customers
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Business Level Strategies:
A strategy combining both cost leadership and differentiation Hence also known as
hybrid strategy
In a way, it is both about process innovation and product innovation But to a limited
extent. The companies prefer not to go overboard with either of these
Examples: Target Stores (US based company) Their punch line is Expect More, Pay Less
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Business Level Strategies:
This is a slightly complex strategy because the company intends to do both at the same
time Value creation by offering differentiated goods and services without raising the
price bar is challenging
There is a fear of Stuck in the Middle A situation wherein the costs are not low
enough and the differentiation does not seem to create any value for customers
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The Park Hotels Case Discussion:
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The Park Hotels Case Discussion:
Sector: Hospitality
General Questions:
1) What is a Boutique Hotel?
2) In the hospitality sector, is the focus more on product or experience?
SM Questions:
1) How can you say that the Park Hotels are following a focus differentiation strategy?
a) In contrast to the general practice followed in the hospitality sector, how sharp
differentiation is followed in the Park Hotels?
b) Size does matter In the context of this saying, how cleverly has this
hotel created a competitive scope for itself?
c) How repeat visits are encouraged by the hotel?
d) How is the hotel strategically targeting towards increasing its consumer base?
e) Has sharp differentiation safeguarded the hotel against economic crisis?
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The Park Hotels Case Discussion:
Sector: Hospitality
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