types of business level strategy

types of business level strategy, 7 Types Level Strategy

7 Types of Business Level Strategy to Boost Your Performance

Business level strategy is the way a company competes in its chosen market. It involves making decisions about how to create and deliver value to customers, and how to gain a competitive advantage. Business level strategy can be classified into seven types, depending on the scope, cost, and differentiation of the products or services offered. Here are the seven types of business level strategy and how they can help you boost your performance.


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Cost Leadership Strategy:

This strategy involves offering products or services at a lower price than competitors, while maintaining acceptable quality and features. This strategy can help you attract price-sensitive customers, increase your market share, and reduce the threat of new entrants. However, this strategy also requires you to achieve economies of scale, control your costs, and avoid price wars.

Differentiation Strategy:

This strategy involves offering products or services that are unique, superior, or more valuable than those of competitors, and that appeal to a specific segment of customers. This strategy can help you create customer loyalty, charge premium prices, and reduce the threat of substitutes. However, this strategy also requires you to invest in research and development, innovation, marketing, and customer service.

Focus Strategy:

This strategy involves targeting a narrow market segment or niche, and offering products or services that meet the specific needs and preferences of that segment. This strategy can help you avoid direct competition with larger firms, build a strong reputation, and establish customer loyalty. However, this strategy also requires you to understand your target market well, adapt to changing customer needs, and protect your niche from imitation or invasion.

Integrated Cost Leadership/Differentiation Strategy:

This strategy involves offering products or services that have both low cost and high differentiation advantages. This strategy can help you appeal to a broader range of customers, achieve both cost efficiency and quality excellence, and balance the trade-offs between cost and differentiation. However, this strategy also requires you to manage the complexity of integrating multiple activities, maintain consistency in your value proposition, and avoid being stuck in the middle.

Best Cost Strategy:

This strategy involves offering products or services that have more features or benefits than those of low-cost competitors, but at a lower price than those of high-end competitors. This strategy can help you attract value-conscious customers, gain a competitive edge in quality and price, and exploit the gaps in the market. However, this strategy also requires you to achieve both low cost and high value, monitor your competitors closely, and avoid confusing your customers.

Blue Ocean Strategy:

This strategy involves creating a new market space or industry that is uncontested by existing competitors, and offering products or services that create new demand and value for customers. This strategy can help you achieve high growth and profitability, create a loyal customer base, and make competition irrelevant. However, this strategy also requires you to identify the unmet needs of customers, innovate radically, and overcome the barriers to entry.

Adaptive Strategy:

This strategy involves continuously adjusting your products or services to fit the changing needs and preferences of customers, markets, and environments. This strategy can help you respond quickly to opportunities and threats, enhance your flexibility and agility, and gain a learning advantage. However, this strategy also requires you to monitor the external and internal factors constantly, experiment with new ideas, and cope with uncertainty and complexity.


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These are the seven types of business level strategy that can help you boost your performance in your chosen market. Depending on your goals, resources, capabilities, and competitive situation, you can choose one or more of these strategies to create and deliver value to your customers.

Types of Business Level Strategy and Global Demand

Business level strategy is about improving the competitive position of a firm’s products or services within a particular industry or market segment. According to Porter, there are three ways of business level strategy: cost leadership, differentiation, and focus. Each of these strategies can affect the global demand for the firm’s products or services in different ways.

Cost Leadership Strategy and Global Demand

Cost leadership is about offering low price products by reducing expenses, creating economy of scale, developing advanced technology, or sourcing raw materials. A firm that adopts this strategy can increase its global demand by attracting price-sensitive customers, expanding into new markets, or creating entry barriers for competitors. However, this strategy also involves some risks, such as price wars, imitation, or reduced quality. Examples of firms that use cost leadership strategy are Walmart, IKEA, and Ryanair.

Differentiation Strategy and Global Demand

Differentiation is about offering unique or distinctive product features that are valued by customers and allow higher prices. A firm that adopts this strategy can increase its global demand by creating customer loyalty, enhancing brand image, or reducing price sensitivity. However, this strategy also involves some costs, such as research and development, marketing, or customer service. Examples of firms that use differentiation strategy are Apple, Starbucks, and BMW.

Focus Strategy and Global Demand

Focus is about targeting a specific market segment or niche with either cost or differentiation advantages. A firm that adopts this strategy can increase its global demand by meeting the needs and preferences of a narrow group of customers, avoiding direct competition, or exploiting local opportunities. However, this strategy also involves some challenges, such as limited growth potential, niche erosion, or increased rivalry. Examples of firms that use focus strategy are Ferrari, Lululemon, and Netflix.

References:

https://www.jstor.org/stable/pdf/10.2979/esj.2004.3.3.29.pdf

https://www.jstor.org/stable/pdf/1250495.pdf

http://people.tamu.edu/~v-buenger/466/Comp_Adv_to_corp_strat.pdf

http://www.eatonprogram.com/wp-content/uploads/2013/01/Strategy-and-the-Internet.pdf

http://www.cs.cornell.edu/home/kleinber/networks-book/networks-book-ch17.pdf



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