MGT 3659 Chapter Notes - Chapter 6.4-6.6: Cost Leadership, Ikea, Blue Ocean Strategy
Document Summary
6. 4 business-level strategy and the five forces: benefits and risks. Strong strategic positions that enhance the likelihood of gaining and sustaining competitive advantage. Five forces model helps to assess the forces. Protection against entry due to intangible resources such as a reputation for innovation quality or customer service. Protection against increase in input prices which can be passed onto customers. Protection against decrease in sales prices, because well- differentiated products or services are not perfect limitations. Protection against substitute products due to differential appeal. Protection against competitors if product or service has enough differential appeal to command premium price. Increasing differentiation of product features that do not create value but raise costs. Increasing differentiation to raise costs above acceptable threshold. Protection against entry due to economies of scale. Protection against increase in input prices, which can be absorbed. Protection against decrease in sales prices, which can be absorbed. Protection against substitute products through further lowering of price.
