Levels of strategic management and their uses

levels of strategic precaution and their uses in that location be three levels of Strategic Management. There is the Corporate Level, the personal line of credit level and the Functional Level. These levels atomic number 18 depicted as underFor for each one level a certain set of questions arises or rather thither is a function for each level plot framing strategies for the ideal telephone circuit.Corporate Level What business(es) should the comp whatever be in?Business Level How should the organization compete in the environment?Functional Level How should the organizations resources be best employed to support its dodging?This article is dedicated to the business level strategies that are macrocosm look ated by managers of several(predicate) firms so that their business has a agonistical payoff over their competitors in the extremely volatile marketplace.Business Level StrategyThe first step for divisional managers is to articulate a model thatll al number 1 a p articipation to contact a competitive advantage over its competitors in the market . They must take into consideration the followingSTRATEGIC CHOICESCustomer take harvest-festival DifferentiationCustomers needs are ever-changing and the firm must be able to innovate and differentiate their products and dish ups from their competitors.Customer group market SegmentationA telephoner needs to group nodes based on the importance of difference in their need and preference. As such a companionship has three alternativesThe company may not make do that different groups have different needs and moves ahead in serving the average out customer.The company may choose to market segment into different states and develop a product that suits the needs of each segment.The company can recognize market segments and choose to provide its products and services only to one market segment.Deciding on Distinctive CompetenciesA company must regulate the manifestive competencies it must pu rsue to satisfy customers needs and groups. In fashioning a business strategy choice, a company must finalize how to organize and combine its distinctive competencies to supercharge a competitive advantage.CHOOSING A GENERIC COMPETITIVE STRATEGY AT THE BUSINESS LEVELChoosing a generic competitive strategy at the business level implies choosing any of the following approachesCost Leadership/ Low representDifferentiation counselAll businesses can pursue regardless of whether they are from the manufacturing sector, service sector, or nonprofit organizations. They can be pursued in different types of industrial environments. Each of the generic strategies results from a companys persistent and consistent choices on its product, the market, and distinctive competenciesOverall Cost LeadershipEstablishing a apostrophize structure that allows a firm to provide goods and services at a lower building block apostrophize than its competitorsStrategic ChoicesThe speak to attractor does not even filter to be the innovatorThe cost leader positions his products to appeal to the minds of the average customerThe ultimate goal of a cost leader is to increase his dexterity and lower his costs.AdvantagesIf competitors charge similar hurts, the cost leader achieves a such(prenominal) superior profitabilityThe cost leader is able to charge a price lower than his competitors.If there are mogulful suppliers , the cost leader is less affected by increase in prices of inputsIf there are powerful buyers, the cost leader is less affected by a fall in price of inputsPurchases are done in wide quantities to increase bargaining power over suppliersThe ability of reducing price to compete with another(prenominal) substitute productsLow prices are a restriction to entry of potential competitors.DisadvantagesThe competitors may lower their cost.The competitors may copy the cost leaders methods.The overall cost leadership strategy carries a find that the cost leader, the sing le minded desire to press costs, may fall back right to changes in customer tastes.DifferentiationDifferentiation strategy refers to the severalize companys ability to satisfy a customers needs.A company must fabricate a product that customers perceive as distinct in an grievous stylusIf customers pay the high price charged for a product( higher than the price charged by cost leader), it means that customers believe the product-differentiated qualities to be worth the difference.Strategic ChoicesFocus on Quality, innovativeness and responsiveness to customer needsStrives to differentiate itself from competitors.Segments the market into many different nichesConcentration on the organisational functions that provide the source of differentiation and competitive advantageAdvantagesCustomers become patriotic and develop brand devotion wrong increases can be passed on to customersPowerful buyers will be easy to find because the product is distinct and therefore there is increase in revenues.Differentiated products and brand patrioticty are barriers to entry of potential competitors.The threat of substitute products is minimized and depends on competitors ability to meet the needs of the customer.DisadvantagesIt is difficult to maintain a long-run distinctness in the customers eyes. Competitors can quickly imitate the companys products.Application of Patents and first-mover advantage are limitedIt is difficult to maintain a continuous allowance priceOverall Cost Leadership Differentiation StrategyThere are some businesses that pursue models of the overall cost leader and discriminator simultaneouslyStrategic ChoicesLimiting the customer options can reduce the cost of labor and marketing costsA company can reduce costs by adopting the JIT inventory model. This inturn improves quality and reliabilityThe internet has proved to be of immense help to marketers as they can engage in e-commerce to advertise and sell their product.These products are often in h uge production in countries with low labor costs.Focus StrategyThe focus strategy is basically serving the customers needs of detail market segments.The location of specific customers eg The people from the northern-East love to eat pork.Whether the customer is a spend-thrift or is a type of customer who saves. Another differentiation would be in terms of quality seekers.After identifying and choosing a specific market segment, a focused company positions itself using either aLow-cost or differentiation strategy.When a company focuses on one group of customers, it is tell that the company is adopting either a focused cost strategy or a focused differentiated strategy.AdvantagesThe focuser is protected from its competitors to the extent that it can cater its products or services that they cant.The buyers cannot get the same thing from others therefore the focuser has power over them.Once brand loyalty has developed in the minds of customers, the crude entrants threats is limitedS ubstitutes will pose minimal problem once the customer develops loyalty towards the product.The changing needs of customers are better tracked by the focuser.DisadvantagesWith regards to powerful suppliers the focuser experiences a disadvantage because it procures in small volume at high costs and therefore cannot pass the cost along to its loyal customersA focuser may have to incur more costs since it is procuring at low volumesIt is tough for a focuser to maintain its niche because of changing customers desires and immediate technological changes.Competitors especially the differentiators will try in their best way to compete for the focusers niche that has been developed.Now, let us focus on companies that adopt different business level strategies to gain a competive advantage over their competitors.Coca-ColaThe Coca-Cola Company (Coca-Cola) is a manufacturer, distributor and marketer of non-alcoholic beverages and syrups, including fountain syrups. It manufactures and sells non -alcoholic beverages, carbonated well-to-do drinks and various varieties of non-carbonated beverages. It is operating in every continent namely North America, Africa, south-central Asia and the Pacific, Europe, South America and Asia, Eurasia and Middle East. Products bearing the Coca-Cola trademark are being marketed in over 200 countries all over the world.This company follows a business level strategy-namely the differentiation strategy. It spends huge amounts of money in promotions and advertisements in order to differentiate their offerings and create a unique find for its cola products. The Coca-Cola company has been successful in differentiating its products from its customers and thereby gains a competitive advantage over them.Amreteck GroupAmreteck Group (AG) is a pharma service company that is specializing in arranging investment funds/investors, financing and is living different mergers for the pharmaceutical companies in the United States and several countries in Sou th East Asia. Amreteck Group helps companies to export their products in Least Developed Countries (LDC) and also assists in locating local distributors and the products registration process in luxuriant completion.Amreteck Group is involved with several local Bangladeshi pharmaceutical companies to take advantage on the countrys low cost environment. AG is adopting the overall low cost strategy to find overbold ways in production cost simplification, upstart product development that can be manufactured at low cost and marketing managers to search for ways of cost reduction in-order to be able to attract customers.ToyotaToyota Motor Corporation is associated with the self-propelling industry. Its automotive operations include the design, manufacture, assembly and sale of passenger cars, recreational and gas utility vehicles, minivans and trucks and parts and accessories for these creations. Toyota is pursuing a combined cost leadership and differentiation business level strat egy. Toyotas production system is actually the roughly efficient in the world as reported. This superior efficiency of Toyota gives the company a low cost strategy in the global car industry. Simultaneously Toyota is able to differentiate its products from its competitors. This superiority gives the company a perimeter to charge premium prices to its elite models. nestleNestl, todays worlds biggest nutrition and beverage company has factories in almost every country in the world. Nestls quick products grow through continuous innovation and dedicated renovation while maintaining a balance in geographic activities and product lines.Nestles priority is to experience out the best products to people, wherever they are depending on their needs end-to-end their lives. Nestl believes in creating and maintaining a long-term commitment to the health and well being of people in every country in the scope of its operations. Nestle follow the business level strategy-namely the differentiat ion strategy to reduce the lay on the line of complexity of supply chain and lower attractiveness for discounters.PepsiCo,IncPepsiCo, Inc. is one of the largest food and beverage companies in the world. The companys principal businesses include Frito-Lay snacks, Pepsi-Cola beverages, sports drinks, Tropicana juices and Quaker Foods.Pepsi Co purely follows the differentiation strategy. Their ability to continuously and sincerely innovate is their competitive advantage. Pepsi looks for opportunities to capitalize on the value of their prestigious brand of products by developing new and innovative products. Pepsi is able to fill consumption gaps, clearly identify the consumers changing needs and contribute to create both healthier and indulgent choices, and then bringing more enjoyment to their lives.Wal-Mart StoresWal-Mart stores (founded in 1945) are a US retailer and are reportedly the largest retailer in the world as of 2009. This store which was originally started by Sam Walton is grouped into Division ace (Discount Stores, Supercenters and Neighborhoods Markets) and SAMs Club. This retailer is pursuing the overall cost strategy to find new ways in reducing the costs of the products that are being displayed in their shelves. Wal-Mart Stores critically negotiates with its suppliers for low priced items to bring forth their Everyday Low Price philosophy. Being a huge market player, Wal-Mart is able to dictate the set of products so much so that it led to the bankruptcy of its competitor K-Mart. Its other nearest competitor Target is forced to offer products that were not offered in Wal-Mart because it could not compete with Wal-Marts prices. Wal-Mart Stores is pursuing and adopting its strategy successfully and is able to gain a competitive advantage over its competitors through continuous low pricing of its products.