BUSI 4609 Lecture Notes - Lecture 5: Quality Management, Flexible Manufacturing System, Cost Leadership
7 May 2018
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Lecture 5
competitive scope
▪ Broad: compete in many customer segment
▪ Narrow: compete in 1 customer segment
5 generic business level strategy
1. cost leadership
a. integrated action to produce goods acceptable to customer at
lower cost
b. product characteristic
i. standardized
ii. low price
iii. broadly acceptable
c. ways
i. control cost
ii. bypass cost
d. 5 forces
i. yes to all except competitor
ii. no price war
iii. high quality
iv. low price
v. require large scale and more time to mature
e. risk
i. process to produce product become obsolete
ii. too focus on cost
iii. easily imitate
f. focus strategy
i. integrated action taken to produce good that serve
particular segment
ii. risk
o imitable
o shift preference
o out focus by competitor
o too attractive segment
iii. factor
o large firm overlook small niche
o build CA
o serve more narrow market
o lack of resource to compete broader
2. focused low cost: differentiated feature at lower cost
3. focused differentiation: focus on narrow segment
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