Business Strategy Tools

1065 Words Apr 13th, 2012 5 Pages
• Be competent in discussing the major concepts underpinning business level strategy

and applying these in business case settings.

• Be capable of applying a series of fundamental business strategy tools (including

industry analysis, competitive strategy and resource and capability tools) and

techniques to the formulation and analysis of value creation and capture at a strategic


Porter 5 Force analysis

Porter framework assumes:

1. industry structure drives competitive behaviour

2. Industry structure is (fairly) stable.


Case: Airline Industry ….
Porter’s 5 forces – purpose: Identifying the different stakeholders, or ‘forces’, which affect:

• The level of competition in
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o Need to combine effective differentiation with low costs.

o Key differentiation variables are speed of response to changing high fashions, style, reputation and quality.

o Cost efficiency requires manufacture in low wage countries.

Example – Ryan Air

• WHAT DO CUSTOMERS WANT? (Analysis of demand)

o lowest prices

o reliable within the marketplace

o comfort and service

o frequency.


• HOW DO FIRMS SURVIVE COMPETITION? (Analysis of competition)

o Focus-differentiation strategy is aimed at a segment of the market fro a product rather than at the whole market or many markets

o The successful way using focus strategy is to tailor a broad of product or service development strengths to a relatively narrow market segment that they know very well

o the company offers the lowest cost of fare than its competitors in the airline

o Ryanair has also become a focuser because it concentrated on a narrow customer segment which include Irish and UK business people or travellers who could not afro to fly major airlines


o The main goal of the company is to provide a no frills service with low fares designed to stimulate demand

o Ryanair has restyled itself and shifted from a full service conventional airline to the first
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