Chap 5 Business-Level Strategies
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This chapter dealt with business-level strategy, which defines an organization’s approach to competing in its chosen markets.
The competitive strategies discussed in this chapter are cost leadership, differentiation, and best cost. In differentiation strategies the emphasis is on creating value through sustainable uniqueness. Uniqueness can be achieved through product innovations, superior quality, and superior service, then sustained and leveraged through creative advertising, brand-building, and strong supply chain relationships. For a differentiation strategy to succeed, customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create it. If the costs are too high relative to competitor, a firm may be able to recover enough of these additional costs through higher prices. The only way a differentiation strategy will work is if buyers value the uniqueness to pay a higher price for it. If a firm is successful at differentiation of its products or services, it will quickly become the target of the imitative efforts of competitors.
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