Summary Business Level Strategy Bulletpoints

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• 1 WEEK 1 INTRODUCTION

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• What does the given graph indicate about competitive advantage over time?

  • The graph illustrates the concept of "Regression towards the mean," indicating that most competitive advantages are temporary.
  • It depicts that the Return on Investment (ROI) for companies in the top third declines over time, while those in the middle and bottom thirds see a rise or stabilization.

• What determines the intensity of competition within an industry according to Porter's Five Forces model?

  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Threat of new entrants into the industry
  • Threat of substitute products from a different industry
  • Competition from industry incumbents, which hinges on factors such as concentration, diversity, product differentiation, excess capacity, exit barriers, and fixed costs.

• How can strategic group analysis be useful within an industry?

  - Strategic group analysis can help identify different strategic niches or positions that companies occupy within an industry.

• What can you add from the PowerPoint slide - a photo showing recent work by Wang (2023) concerning changes in industry and corporate effects in the US?

  • Photo showing recent work by Wang (2023) on industry changes in the US
  • Corporate effects illustration
  • Slide related to US economic alterations

• Why do some companies outperform others in the same industry according to the competitive strategy and value creation model?

  • Companies outperform others by creating more value for customers (WTP) while maintaining or reducing costs.
  • Effective business-level strategy allows for a higher capture of value, both for clients and the firm.
  • Outperformance is achieved when the value created exceeds the price and cost, leading to greater profitability.

• Describe the graphical representation of the generic strategies for competitive advantage depicted.

  • This chart compares generic strategies for competitive advantage on two metrics: buyer value generated and costs incurred.
  • Industry average competitor shows the baseline for buyer value and costs.
  • Differentiation strategy has higher buyer value but also higher costs.
  • Low-cost strategy reduces costs while offering slightly less buyer value than industry average.
  • Dual advantage strategy aims to offer high buyer value while keeping costs at the same level as the low-cost strategy.

• What are the two generic strategies identified by M. Porter in 1985 that firms use to achieve competitive advantage?

  • Cost leadership: One strategy where a firm sets out to be the lowest cost producer in its industry.
  • Product differentiation: Another strategy where a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers.

• What are some examples of generic strategies demonstrated by different companies?

  • LIDL: Cost leadership
  • CANADESE GOOSE: Product differentiation
  • MCDONALDS: Cost leadership
  • TONY CHOCOLONELY: Cost leadership
  • TESLA: Product differentiation
  • RYANAIR: Cost leadership
  • AMAZON IN ONLINE RETAIL: Cost leadership

• What factors determine the profit-earning potential of a resource or capability according to the provided framework?

  • The extent of the competitive advantage (CA) established: Scarcity, Relevance
  • Sustainability of the CA: Durability, Transferability, Replicability
  • Appropriability: Property rights, Relative bargaining power, Embeddedness

• What factors contribute to the sustainability of a competitive advantage?

  • Durability of resources and capabilities
  • Reputation with long durability like Coca-Cola and Apple
  • Consideration of rivals' ability to imitate the advantage
  • Transferability, immobility, and replicability of resources