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Chapter 4

Comm 401 Chapter 4.docx

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Concordia University
COMM 315

Chapter 4 BusinessLevel StrategyA businesslevel strategy is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product marketsBusinesslevel strategy indicates the choices the firm has made about how it intends to compete in individual product markets Every firm must form and use a businesslevel strategy However every firm may not use all the strategies corporatelevel merger and acquisition international and cooperativeThus businesslevel strategy is the core strategythe strategy that the firm forms to describe how it intends to compete in a product marketIn terms of customers when selecting a businesslevel strategy the firm determines 1 who will be served 2 what needs those target customers have that it will satisfy and 3 how those needs will be satisfiedCustomers Their Relationship with BusinessLevel StrategiesA key reason firms must satisfy customers with their businesslevel strategy is that returns earned from relationships with customers are the lifeblood of all organizationsThe most successful companies try to find new ways to satisfy current customers andor to meet the needs to new customersEffectively managing relationships with customersThe firms relationships with its customers are strengthened when it delivers superior value to them Strong interactive relationships with customers often provide the foundation for the firms efforts to profitably serve customers unique needs Anticipate customers needsFirms relationships with customers are characterized by 3 dimensionsReach richness and affiliation1Reach concerned with the firms access and connection to customers Extend reach adding customers in the process by doing so2Richness concerned with the depth and detail of the twoway flow of information between the firm and the customer using internet servicesbenefits customers knowledge about company and companys knowledge about customers needs3Affiliation concerned with facilitating useful interactions with customers Viewing the world through the customers eyes and constantly seeking ways to create more value for the customer have positive effects in terms of affiliationeffectively managing customer relationships helps the firm answer questions related to the issues of who what and how1 Who Determining the customer to serveWho the target customer is that the firm intends to serve with its businesslevel strategyMarket segmentation process that clusters people with similar needs into individual and identifiable groupsCommon characteristics on which customers needs vary consumer markets demographic geographic industrial markets enduse segments product segments based on technological differences or production economics2 What Determining which customer needs to satisfyDeliver what they want and when they want itBuy products that creates value to them
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