BUS 498 Lecture Notes - Lecture 6: Blue Ocean Strategy, Cost Leadership, Competitive Advantage
Document Summary
Chapter 6- business strategy: differentiation, cost leadership, and blue oceans. 6. 1 business-level strategy: how to compete for advantage. Goal-directed actions: to achieve competitive advantage. Industry & firm effects jointly determine competitive advantage. Profile based on value creation and cost. A valuable and unique position, which: meets customer needs, at the highest possible product value, for the lowest possible product cost. Choices between a cost or value position. Tension between: value creation and, pressure to keep cost in check. Purpose to maximize the firm"s: economic value creation, profit margin. Differentiation: seeks to create higher value vs. competitors, offers unique features, charges higher prices. Cost leadership: seeks to create similar value vs. competitors, charges lower prices. These two business strategies are called generic strategies because they can be used by any organization. Manufacturing or service, large or small, for-profit or nonprofit, public or private, domestic or foreign in the quest for competitive advantage, independent of industry context.
