Strategic management

Business -level strategy refers to various actions and commitment that are coordinated and integrated and which gives competitive advantage to an organization through exploitation of core competences in the markets of a particular product. It involves the choices made by the organization which are mostly difficult and can be very upsetting (Hitt, Ireland & Hoskisson, 2017).

There are various kinds of business-level strategies and include: Cost leadership strategy – this refers to various actions that a firm takes in production of goods and services while considering features that customers will accept at least possible cost in relation to those offered by competitors (Hitt, Ireland & Hoskisson, 2017).

Differentiation strategy – involves the incorporated actions set that a organization takes in providing products that can be seen by the customer as being exceptional in way that they need. It involves targeting those customers who view value in the product or service as intended for them in way in which they are unique from others provided by competitors (Hitt, Ireland & Hoskisson, 2017).

Focused strategies – refers to the business approaches undertaken by firm where it intends to utilize their core competencies in serving the needs of a specific niche or segment of an industry while excluding others. Such specific markets may include a given buyer group, product line segment or geographical market. The strategy is thus incorporated actions that a firm takes to produce products to satisfy the needs of a given competitive market. They include Focused Cost Leadership Strategy and Focused Differentiation strategy (Hitt, Ireland & Hoskisson, 2017).

Focused Cost leadership Strategy offering various products to a specific target segment, at low price since they are produced a low costs. Focused Differentiation Strategy is an approach where a firm differentiates products in various ways (Hitt, Ireland & Hoskisson, 2017).

Integrated Cost leadership or Differentiation Strategy refers to actions taken by the firm that allows them to carry out basic and support activities in such a way that they can achieve differentiation and low cost at the same time. This allows the firm to serve customers who desire to buy differentiated but low priced products (Hitt, Ireland & Hoskisson, 2017).

 

 Having a focus strategy means undertaking various actions with an aim of producing goods or services that will satisfy the needs of a specific competitive segment in the market. it involves serving the needs of that segment of the market or industry in way that the competitors will not and hence gaining an advantage (Hitt, Ireland & Hoskisson, 2017).

TQM – Total Quality Management refers to where an organization commits fully to serving its customers and continuously advancing every process using approaches meant for problem solving and that are data driven an whose foundation is employee team’s empowerment. The TQM systems are aimed at improved customer satisfaction, cost reduction, minimum time required in presenting innovative goods and services to the market. It involves exceeding the expectations of customers in regard to quality through differentiation and elimination of any inefficiency in the process thereby reducing cost and providing quality in the market (Hitt, Ireland & Hoskisson, 2017).

Multi-market competition- refers to where organizations are rivals in some geographic markets or products. An example of firms in a multi-market competition includes Delta and United Airlines (Hitt, Ireland & Hoskisson, 2017).

Competitive behavior is driven by awareness, motivation and ability and such influence is indicated by various actions and responses taken in the competitive rivalry.

Awareness – means the degree to which competing firms identify the extent of mutual interdependence which stems from resource similarity and commonality of the market. It is more visible where companies have same amounts and types of resources which they use in the midst of competition in various markets (Hitt, Ireland & Hoskisson, 2017).

Motivation – involves the incentive of a given organization to act or respond to the attack initiated by its rival, the likely gains and losses out of this competition. As such a business may lack motivation to compete with rivals if management thinks that such competition will not improve the firm’s position or change its position in the market (Hitt, Ireland & Hoskisson, 2017).

Ability refers to the resources of a firm and flexibility that stems from them. Lack of resources means that a firm cannot respond to various actions taken by a competitor or initiate an attack against the competitor (Hitt, Ireland & Hoskisson, 2017).

 A first mover refers to the business that initiates an action so that it gains or defends its competitive edge or enhances its place in the market.  Second mover refers to an business that reacts to competitive action taken by first mover basically through imitation .The first mover uses its resource to initiate an action while the second mover respond after observing customers reaction and  exploiting the mistakes made by first mover. The later mover refers to the firm whose response to the competitive action comes long after the action by first mover and reaction by second mover (Hitt, Ireland & Hoskisson, 2017).

Slow-cycle market is a market where the competitive edge of a firm cannot be imitated for a long term and where cost of imitation is high. Fast –cycle market is one where firm’s competitive edge can be imitated and such imitation is cheap and rapid (Hitt, Ireland & Hoskisson, 2017).

Synergy refers to advantage or value gained by using assets together than when their use is done separately (Hitt, Ireland & Hoskisson, 2017).

Economies of scope refers to costs created by a firm when capabilities and resources are used together or when core competence at corporate level  and which were built in of its business affiliate to another business affiliate (Hitt, Ireland & Hoskisson, 2017) .

Reference

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic management: Competitiveness & globalization: concepts and cases. Boston, MA: Cengage Learning.