Business Strategy

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Business Strategy

• Dr. Mary A. Hamilton
• STRATEGIC MANAGEMENT

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Generic Business StrategiesFigure 5.1 (Adapted
from Michael Porters Competitive Strategy (1980)
STRATEGIC ADVANTAGE
Differentiation
Lower Cost
Broad Differentiation Strategy
Overall Cost Leadership Strategy
S A T U R D A I T E E N G C I
E C

Industry Wide
Best Value Strategy
Focused Cost Leadership Strategy
Focused Differentiation Strategy
Target Segment
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Generic Strategy ApplicationFigure 5.2 (Adapted
from Michael Porters Competitive Strategy (1980)
STRATEGIC ADVANTAGE
Differentiation
Lower Cost
S A T U R D A I T E E N G C I
E C

Industry Wide
Target Segment
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Strategic-Group Map of Competitive
Products/Services
High
Value of Product/ Service Price/ Quality
Low
Few
Many
Number of Product/Service Categories
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Strategic Plan Assessment

• Dr. Mary A. Hamilton
• Strategic Management

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Prisoners DilemmaA Nash Equilibrium
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Types of Competitive Strategies
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Framework for Competitive AnalysisFigure 7.1
Future Goals Market Organizational Dimensions
Current Strategy Competitive Strategic Initiativ
es and Tactics
Competitive Response Satisfaction with current po
sition Likely Strategic Shifts Competitive Move
s Competitive Vulnerability Actions Likely to Pr
ovoke Greatest Most Effective Retaliation
Resources Tangible Intangible Assets and Capa
bilities
Assumptions Itself (Firm-Specific) and the Indu
stry
Source Michael Porter (1980) Competitive Strategy
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Competitive strategy

• Application

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Competitive Analysis
Current Strategy Constant analysis of customer wa
nts and needs Continuous quality improvement Peo
ple centered/teamwork model
Market share growth
Future Goals Leading Customer Satisfaction Stron
g, Innovative Workforce
Strong Financial Returns
Competitive Response (1) Not firmly satisfied se
eks to improve positioning (2) Likely responses
technology upgrades to network,
additional price/plan offers (more minutes,
better options), strong promotion of network adv
antages (3) Vulnerability very low non-roaming c
overage, best phones but also frequently the mos
t expensive (4) Retaliation significant network
technology upgrades, price cutting / plan adding
, license expansions
Resources Over 26 million customers 67,000 emplo
yees Over 43 billion in total assets Strong lic
ensing agreements (Virgin Mobile)
Largest standardized advanced digital network
Assumptions Technology leaders Leading license d
eals
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Competitive Analysis
Current Strategy International standardization co
nformity Pursue self-service via e-business Inte
nse focus on WiFi / mobile Internet
Plan type variety (family/business)
Market share growth
Future Goals Standard for international commerce
Leading WiFi (HotSpot) provider Strong
Financial Returns
Competitive Response (1) Not satisfied seeks bus
iness and consumer growth (2) Likely responses I
nternet access upgrades to network,
additional price/plan selections (more
customization), strong promotion of internationa
l advantage (3) Vulnerability presently low US m
arket share, most advantages apply to business no
t consumer market (4) Retaliation expansion of s
upport internationally, strong
entrance into WiFi market, price cutting / plan
adding
Resources 13.1 million US customers parent compa
ny Deutsche Telekom Group over 87 million intern
ationally Only standardized network international
ly Leading WiFi / mobile Internet combination
Assumptions Only international standard Fastest
growing provider
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Competitive Analysis
Future Goals Become leader in white collar market
Maintain leadership in walkie/talkie market Str
ong financial returns
Current Strategy Offensive strategy to capitalize
on its rivals weakness Growth through acquisiti
ons
Competitive Response (1) Unsatisfied being 3rd la
rgest firm (2) Likely responses strengthened off
ensive attacks on the weaknesses of rivals (3) V
ulnerability significant shifts in technology
demand (4) Retaliation price cutting aimed, part
icularly at cuts aimed at the blue collar/busines
s market
Assumptions Voice technology superior Growth ind
ustry
Blue collar leadership
Resources Revenue of 10.8 billion Best walkie-ta
lkie infrastructure
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Competitive Analysis
Future Goals Even greater market share Decrease
customer turnover (now 30) To become the largest
provider in the US
Strong financial returns
Current Strategy Building up size and market shar
e
through mergers/acquisitions (Cingular)
Competitive Response (1) Basic satisfaction with
current positioning (2) Likely responses strong
focus on increasing market share
(3) Vulnerability any competitive moves that
appeal to large base (4) Retaliation intensive p
rice cutting wars
Assumptions More customers/size more profits O
nly one way to provide service plans
Prices standard competition based on
phones, features, special deals
Resources Second largest provider Cingular merge
r will make them the largest with 30 million
customers
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Competitive Analysis
Future Goals Market share growth Strong customer
retention
Strong financial returns
Current Strategy Technology research developmen
t
Maintain coverage advantage
Competitive Response (1) Basic satisfaction with
current positioning (2) Likely responses additio
n of new features (Push-to-Talk)
(3) Vulnerability technology change, network
mergers (4) Retaliation intensive price cutting
wars
Resources Strong customer service teams Best nat
ional network coverage Strong RD teams Owned by
Vodafone, largest mobile phone provider in world
Assumptions Best reception / coverage Great adve
rtising