Generic Business Level Strategies

Source of Competitive Advantage

Cost

Uniqueness

Breadth of Competitive Scope

Broad Target Market

Cost Leadership

Differentiation Focused Differentiation

Narrow Target Market

Focused Low Cost

Value Creating Activities Common to a Cost Leadership Business Level Strategy

Cost Effective MIS Systems

Firm Infrastructure

Simplified Planning Practices to Reduce Planning Costs

Relatively Few Management Layers to Reduce Overhead

Support Activities

Consistent Policies to Reduce Turnover Costs

Human Resource Management Technological

Efficient Plant Scale to Minimize Manufacturing Costs IDevelopment nvestments in Technology in order to Reduce Costs Associated with Manufacturing Processes Frequent Evaluation Processes to Monitor Suppliers Performances

Effective Training Programs to Improve Worker Efficiency and Effectiveness

Easy-to-Use Manufacturing Technologies

Systems and Procedures to find the Lowest Cost Products to Purchase Raw Materials Highly Efficient Systems to Link Suppliers Products with the Firms Production Processes

Procurement
Operations Outbound Logistics

Timing of Asset Purchases Policy Choice of Plant Technology Organizational Learning

Located in Close Proximity with Suppliers

Efficient Order Sizes

National Scale Advertising

Interrelationships with Sister Units

Primary Activities

Marketing & Sales

Inbound Logistics

Delivery Schedule Small, Highly Effective Product that Reduces Trained Sales Force Installations to Costs Reduce Frequency and Severity Selection of Low Products Priced to of Recalls Cost Transport Generate Sales Carriers Volume

Service

Value Creating Activities Common to a Differentiation Business Level Strategy

Highly Developed Information Systems to better understand customers purchasing preferences

Firm Infrastructure
Extensive use of subjective rather than objective performance measures

A companywide emphasis on producing high quality products Superior personnel training Strong capability in basic research

Support Activities

Compensation programs intended to encourage worker creativity and productivity Coordination among R&D, product development and marketing

Human Resource Management Technological Development

Investments in technologies that will allow the firm to consistently produce highly differentiated products Purchase of highest quality replacement parts

Systems and procedures used to find the highest quality raw materials Superior handling of incoming raw materials to minimize damage and improve the quality of the final product Consistent manufacturing of attractive products

Procurement
Operations Outbound Logistics

Rapid responses to customers unique manufacturing specifications

Extensive Rapid and timely personal product deliveries relationships to customers with buyers Premium Pricing

Primary Activities

Marketing & Sales

Inbound Logistics

Service

Accurate and responsive order processing procedures

Strong Coordination among functions in R&D, Marketing and Product Development

Complete field stocking of replacement parts

Generic Business Level Strategies

Source of Competitive Advantage

Cost

Uniqueness

Breadth of Competitive Scope

Broad Target Market

Narrow Target Market

Cost DifferenLeadership tiation Integrated Low Cost/ Differentiation Focused Focused DifferenLow Cost tiation

Evaluating A Businesss Rapid Response Opportunities -C. Examples of Ways Businesses Achieve Competitive Advantage
Use of companywide technology sharing activities and autonomous product development teams to speed new product development
Technology development Human resource management General administratio n Procurement Locate service technicians at customer facilities that are geographically close

Develop self-managed work teams and decision making at lowest levels to increase responsiveness

Highly automated and integrated information processing system; include major buyers in the systems on a real-time basis Preapproved, online suppliers integrated into production
Working very closely with suppliers to include their choice of warehouse location to minimize delivery time
Inbound logistics

Standardize dies, components, and production equipment to allow quick changeover to new or special orders
Operations

JIT delivery plus partnering with express mail services to ensure very rapid delivery
Outbound logistics

Use of laptops linked directly to operations to speed the order process and shorten the sales cycle
Marketing & sales