Strategic Management 2014 – 2015

WEEK 6Business Level Strategy

International Business Management

Lecturer : Ign Teodore Teddy Saputra S.E.,M.B.A

Why Need Strategy

• Optimalisasi Asset (Weekness and Strenght)• Perubahan Lingkungan eksternal

(Opportunities and Threats)

STRATEGI ACTION : STRATEGY FORMULATION

BUSINESS LEVEL STRATEGY

A business-level strategy is an integrated and coordinatedset of commitments and actions the firm uses to gain a

competitive advantage by exploiting core competencies inspecific product markets.

The Relataionship Between Customer and business level strategies

• Satisfies a group of customers by using The competitive advantages

• Returns earned from relationship with customers are the lifeblood of all organizations

Bagaimana Pengaruh nya dengan perubahan external yg mungkin terjadi ?

Example “

“Harrah’s Entertainment is focused on building loyalty and value with its customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership.”

Relationship To Customer Reach, Richness, and affiliation ............

First Dimension :ReachThe reach dimension of relationships with customers is concerned with the firm’s access and connection to customers

Second Dimension: Richnessconcerned with the depth and detail of the two-way flow of information between the firm and the customer

Broader and deeper information based exchanges allow firms to better understand their customers and their needs

Third dimension: AffiliationConcerned with facilitating useful interactions with customers

Viewing the world through the customer’s eyes and constantly seeking ways to create more value for the customer have positive effects in terms of affiliation

Effectively managing customer relationships (along the dimensions of reach, richness, and affiliation) helps the firm answer questions related to the issues of who, what, and how

Who .....

Companies divide customers into groups based on differences in the customers’ needs (Market Segmentation)

What .....

Targeted customer group’s needs that its goods or services can satisfy

Needs (what) are related to a product’s benefits and features

Check This Out ...

In the recent global financial crisis, companies across industries recognized their Customers’ need to feel as secure as possible when making purchases.

Allowing customers to return their cars if they lose their job within 12 months of the purchase is how Hyundai Motors decided to address this consumer need, creating value in the form of security.

How .....

To Determine how to use its capabilities and competencies to develop products that can

satisfy the needs of its target customers

The Purpose Of Business Level Strategy ..

The purpose of a business-level strategy is to create differences between the firm’s position and those of its competitors

ACTIVITY MAP

Types Of Business Strategy

Cost Leadership

The cost leadership strategy is an integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost, relative to that of competitors

Differentiation Strategy

The differentiation strategy is an integrated set of actions taken to produce goods or services (at an acceptable cost) that customers perceive as being different in ways that are important to them

Focus Strategy

The focus strategy is an integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment

Focus Cost Leadership Strategy

Young buyers desiring style at a low cost are IKEA’s target customers

Focus Differentiation Strategy

New Look Laser Tattoo Removal, located in Houston, Texas, specializes in removing tattoos that customers no longer desire

Integrated Cost Leadership / Differentiation Strategy

It seems that most consumers want to pay a low price for products with somewhat highly differentiated features

Total Quality Management (TQM)

Total quality management (TQM) is a “managerial innovation that emphasizes an organization’s total commitment to the customer and to continuous improvement of every process through the use of data-driven, problem-solving approaches based on empowerment of employee groups and teams.

ASSIGNMENTThis assignment brings together elements from the previous chapters. Accordingly, you and your team will create a business-level strategy for a firm of your own creation.

You will create an entry strategy using one of the five business-level strategies.Each team is assigned one of the business-level strategies described in the chapter:

• Cost leadership• Differentiation• Focused cost leadership• Focused differentiation• Integrated cost leadership/differentiation

Have A Nice Day Class......