MGT 3659 Chapter Notes - Chapter 6.1-6.3: Competitive Advantage, Cost Leadership, Customer Service
Document Summary
6. 1 business level strategy: how to compete for advantage. The goal-directed actions managers take in their quest for competitive advantage when competing in a single product market. Must answer the who what why and how. Industry effects - industry attractiveness, complements, strategic groups. Competitive advantage is determined jointly by industry effects and firms effects. Firm effects - value position, cost position, business strategy. These 2 are interdependent and on a firm level everything is relative to other companies in the industry. Choices between a cost or value position. Such choices are necessary because higher value creation tends to generate higher cost. Economic value created = value - cost. Higher value creation tends to require higher costs, making competitive advantage difficult. More likely to lead to competitive advantage if clear strategic profile, either differentiator or low cost leader. Generic business strategy that seeks to create higher value for customers than the value that competitors create.
