BUS 478 Chapter 5: Ch. 5 Notes

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 478
• Professor: Pek- Hooi Soh

Document Summary

Business-level strategy = overarching competitive theme of company in a given market. At its most basic, boils down to mission statement. Who to serve, what needs/desires to satisfy, how to do so. 2 basic ways companies compete: lowering costs. 2 advantages: allow company to charge premium price for its good/service, help company grow overall demand & capture market share from rivals. Differentiation often raises cost structure of firm. Also times where successful differentiation, b/c increases primary demand so much, can actually lower costs leads to economies of scale. Only companies that get to efficiency frontier gains comp adv. Strategy is more about achieving right balance b/t differentiation & low costs. Efficiency frontier = diff positions company can adopt w/ regard to differentiation & low cost. To successfully implement business-level strategy & reach efficiency frontier, company must pursue right functional-level strategies & be appropriately organized. Not all positions on industry"s efficiency frontier equally attractive.