WEEK 6 Business-level strategy 2019 PDF

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WEEK 6 Business-level strategy. Firms that perform well, even in very competitive industries, will follow some pattern of decision-making and execution that is internally consistent. That is, the firm will line up its resource commitments in a way that reinforces the direction of the enterprise. If these decisions are inconsistent, the outcome will be resource commitments that work against one another and hinder the progress of the business. This week lays out the basic strategy patterns that can lead to competitive advantage. Knowing these will help you understand how to make the most of the firm’s potential. This week's objectives By the end of this week you should be able to: 

give examples of business-level strategies and explain the differences between them



use the five forces of competition model to explain how aboveaverage returns can be earned through each business-level strategy.

6.2 Business strategy and theory As you'll see in your reading this week, there are two types of business strategies. Our video this week doesn't cover interactive strategies like game theory; rather, it focuses on competitive strategies. Look out for:

two types of competitive strategies (also known as generic competitive strategies) the reason why competitive strategies are important regardless of which sector you're in. Exploring strategy 10th edition – author interview: Competitive strategy (2014) As mentioned above, we've only looked at competitive strategies here. As you progress to your essential readings this week, ask yourself: What might interactive strategies be? How might they differ from those presented in the video? Let's take a look at the case study of David Jones. Case study: David Jones This case study examines Australia’s leading specialty retailer, David Jones, and discusses some of the ways it has developed to set itself apart

from competitors. Since being taken over by South African company Woolworths in 2014, David Jones has changed its differentiation strategy to focus on the growth of Asian consumers living and/or visiting Australia. By focusing on the needs and wants of Asian consumers, David Jones has further differentiated itself from Myer by providing more attractive shops with more exclusive premium brand merchandise. In addition to this, David Jones has invested a great deal in updating its food hall business in order to make it more appealing to high-end shoppers. Have a think about how frequently you visit David Jones, Myer or other similar stores. Can you think of ways in which these competitors try and differentiate themselves from one another? How does David Jones identify meaningful differentiation?

David Jones (n.d.) For more information on this case study, read Chapter 4 Case study: Is David Jones on the threshold of success? (Links to an external site.) (p. 105) in your eText. Essential readings Read Chapter 4 Business-level strategy (Links to an external site.) (pp. 104–131) in your eText for an understanding of business-level strategies, the differences between them and the relationship between a firm’s customers and its business-level strategy in terms of who, what and how. Pay attention to the David Jones case study and think about the whole experience, not just what is in front of you. Try to make the connection that competitors have differentiated themselves on several dimensions

including ambiance, locations, brand, and service, among other things. Consider the relative merits or failures of David Jones in Australia. 6.3 Discussion: Business-level strategies - MGT30005 Learning Group 02 44 unread replies.44 replies. Purpose This week we turned our attention to business-level strategies, which are essentially about how an organisation lines up its resources and organises itself to exploit their competitive advantage. This discussion is an opportunity to identify and understand different business-level strategies, in particular, two generic approaches: low cost strategies and differentiation strategies. Participating in this discussion will help you complete this week's activity and Assignment 2: Group strategic analysis of an organisation. This discussion supports unit learning outcomes 1, 2, 3, 4 and 5. This should take approximately 20 minutes to complete. Task Step 1: Post your response based on the following prompts: 

If your last name begins with A–L: o



discuss the pros of low-cost strategies and provide an example of an organisation that has used this type of strategy (keep it brief; three to four sentences).

If your last name begins with M–Z: o

discuss the pros of differentiation strategies and provide an example of an organisation that has used this type of strategy (keep it brief; three to four sentences).

Step 2: Reply to a peer who discussed a different strategy to you. Identify a disadvantage of using the business-level strategy they discussed. Do you know of an organisation that has used the strategy unsuccessfully? Why do you think this occurred? Aim to contribute to the discussion by the end of the week. MY RESPONSE Low-cost strategies are utilised by a business which can perform their activities, within scope, at an advantage to their competitors. In 2008, Kmart changed from a ‘discount store’ (misleading definition) to Everyday Low Prices (ELP) on a decreased product range. Sourcing trendy products

became a direct relationship with a reduced number of suppliers. ‘Lean’ picking and packing with smaller carton sizes lowered logistics costs.

Reply to 6.3 Discussion: Business-level strategies - MGT30005 Learning Group 02 

Samantha McKee | eLA Jul 2, 2019Jul 2 at 12:19am Manage Discussion Entry Business-level Strategy If you remember Week 5 we looked at competitive advantage. I called it the strategic Holy Grail. It’s about what assets/resources/capabilities do we have (or we need to obtain), relative to our competitors, that could be leveraged in the marketplace to drive ‘above average returns’. Now in Week 6 we turn to business level strategy which is about how a firm lines up its resources and organises itself to exploit the competitive advantage identified last week. The essence of business level strategy is that high-performing firms will tend to follow some pattern of decision-making and execution that is internally consistent. As the e-text defines it: “Business-level strategy is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets” The two simplest approaches (generic strategies) a firm can take are: 1. Low cost strategies: Generally this allows a firm to charge low prices to the consumer and in turn attract higher volumes i.e. Costco, ALDI 2. Differentiation strategies: These allow firm’s to charge a premium. But to do this, they must be able to provide greater value i.e. Apple. There are pros and cons of each of these and I highly advise reading from p.111 of the e-text ‘Types of business-level strategies’. Also, look around at the firms you know and see every day and think about where they sit on this continuum between low cost (generally low differentiation) and high differentiation (generally high cost)? Identifying and

understanding different business-level strategies is a key outcome we are looking for in this week. But please note, there are many other strategies available to organisations regardless of their size, ownership structure, position in the market etc. It’s interesting to see how firms can attempt to move (generally very slowly and cautiously) between these 2 generic strategies. One day a firm that you believe is offering lowest prices is suddenly not the lowest price, but they may be giving you something of value that you didn’t have before. This may allow them to charge a marginally higher price and therefore gain a higher return. Firms should always be monitoring their customers (current and potential), who they’re they spending disposable income with and how they perceive your brand and the value in the products / services they have available to them. ‘Customers and their relationship with business-level strategies’ is well documented from page 107 of the etext. And why do you need a business level strategy? Ultimately, there are many ways to answer this. One of the lines from the Whittington video is very pertinent. It enables organisations (regardless of public or private),”to attract investment and support”. Without this there will be a competitor looming who gets the investment that will prevent you from growing and/or surviving. There is also another explained in the e-text which is related to Week 5 on Competitive Advantage, “to create differences between the firm’s position and those of its competitors.” So in this respect, by building something (i.e. a resource, capability) from nothing, a firm can become better at it than its competitors and deliver a product a customer is prepared to pay for. Hope you enjoyed this. Let’s keep the Discussion Board conversation [click here] flowing around pro’s of a low cost and a differentiation strategy In Week 7 we turn to Corporate-level strategy which is where a company now pulls all of the elements from Week 1 to 6 to determine how it can grow effectively. Hi everyone, Jetstar is a successful example of low-cost. Have a look at this interesting article about how they manage the brand globally: https://skift.com/2016/09/21/ceo-interview-running-jetstargroup-the-worlds-most-unique-low-cost-carrier/ (Links to an external site.)

What do others think is an example of Focused cost leadership and Focused differentiation? Think about Target's combo of 'Expect more, pay less' - what does this imply? What strategy do you think they have chosen? 6.4 Activity: How does your client implement its strategy? (Getting started on Assignment 2) Purpose For Assignment 2: Group strategic analysis of an organisation (and likely, for the exam as well), you will need to review a given scenario, and then analyse and assess the firm's implementation of strategy. This exercise is designed to help you get started on your research—and to start analysing your client for Assignment 2. This should take approximately 60 minutes to complete. Task Step 1: Schedule a time this week to get together with your team for Assignment 2. Decide on a communication method—we have provided you with a team discussion or you can use Google Hangout, Zoom or Skype—if you can't find one time that suits everyone. Step 2: Research your chosen client. Within your team, research these questions: 1. What was your client's strategy development process? 2. What elements of intended strategy does your client use? 3. What elements of emergent strategy does your client use? 4. How does your client communicate its strategy? You will need to decide as a team how to divide up the task of research; organising these tasks yourselves is part of the assignment task. You will also need to decide where to gather your research—will you use the Team discussion page? Or will you use Google Docs, and only use the Team discussion page for progress reports? (Spend a minimum of 25-30 minutes researching for this activity, but you will need to do more research than that to complete your assignment.) Step 3: Later in the week, assess as a team how well you think your client implements its strategy. Document your decision and your reasoning.

If you can get together as a team, have a live discussion over Skype, Zoom or Google Hangout. If not, consider how you might accomplish your discussion in your team discussion page. Aim to divide your tasks and get started by the end of the day Wednesday. Plan to finalise your research and evaluation by the end of the day on Sunday. You will need to submit your work into your Team Discussion if you want feedback. Teamwork resources This activity is a good chance for you to get started working as a team, and to smooth out any problems early. Struggling with teamwork? Check out these optional support resources: 

Tips for successful teamwork. (Links to an external site.) (Swinburne Online 2019)



Dealing with team conflict. (Links to an external site.)(Swinburne Online 2019)



Missing team members (Links to an external site.). (Swinburne Online 2019)

6.5 Week in review Before you move on to Week 7: Corporate-level strategy, take some time to reflect on this week's readings and assignment tasks.

Weekly readings All the readings you came across this week have been collated below, so you can access them easily next time you're in the unit.

Essential readings Read Chapter 4 Business-level strategy (pp. 104–131) in your eText.

A Reference list is provided. The correct Swinburne Harvard style should be used as much as possible to promote your skills in academic citation. This skill is particularly important in each of your assignments....