Essay on The Description of a Business-Level Strategy

1254 WordsMar 2, 20066 Pages
A business-level strategy is an integrated and coordinated set of commitments and actions that firms use to gain a competitive advantage by exploiting core competencies in specific product market. Only firms that continuously upgrade their competitive advantages over time are able to achieve long-term success with their business-level strategy. Effective management of customer relationships help the firms answer questions related to the issues of who, what, and how. Customers are the foundation or essence of an organization's business-level strategies. Who will be served, what needs have to be met, and how those needs will be satisfied are determined by the senior management. To make this decision, companies divide customers into…show more content…
Firms use core competencies which are how, to implement value-creating strategies and thereby satisfy customers' needs. Only those firms with the capacity to continuously improve, innovate, and upgrade their competencies can expect to meet and hopefully exceed customers' expectations across time. Other than who, what, and how there are also five generic strategies that are used to help organizations establish a competitive advantage over industry rivals which are cost leadership, differentiation, focused cost leadership, focused differentiation and integrated cost leadership/differentiation. Firms may also choose to compete across a broad market or focused market. Cost leadership: Organizations compete for a wide customer based on price. Price is based on internal efficiency in order to have a margin that will sustain above average returns and cost to the customer so that customers will purchase your product/service. Works well when product/service is standardized can have generic goods that are acceptable to many customers, and can offer the lowest price. Continuous efforts to lower costs relative to competitors are necessary in order to successfully be a cost leader. For example: • Building state of art efficient facilities (may make it costly for competition to

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