Exam 4: Business-Level Strategy

A manufacturer of jewelry imitates the style of a popular and expensive brand using manufactured stones rather than real gemstones and lesser grade metals rather than silver and gold. The manufacturer packages the jewelry in boxes of the same color imprinted with an almost identical logo. About 85 percent of the company's sales are Through Internet sales. This example illustrates the competitive risk of differentiation strategy.

When selecting a business level strategy,the firm determines who will be served,what customer needs will be satisfied,and how those needs will be satisfied.

Case Scenario 1: International Cow Packers. International Cow Packers (ICP)is a $12 billion meat processor (slaughter, processing, and packing). Founded in v1943, ICP has grown to become the largest beef and pork processor in the United States (revenues come 90 percent from beef and 10 percent from pork)and also has a growing export market to Japan. The company follows a focused cost leadership strategy, delivering USDA-graded meats primarily to the institutional (schools, prisons, hospitals)and supermarket channels. ICP's entire value chain is organized to deliver volume product at the industry's lowest per-unit cost. Its supplier industries, primarily cattle and swine feedlots, have relatively little power since prices for these raw materials are determined in the commodity markets. While entry barriers to the industry are high due to high minimum start­up costs, industry rivalry is extremely intense-primarily due to the fact that three large companies (including ICP)control 80 percent of the market for processed meats. The threat of substitutes is high with an increasing trend for consumers to favor poultry and other non-beef proteins. Buyers are also powerful since supermarkets are relatively concentrated at a regional level and end consumers have ample choices. -(Refer to Case Scenario 1). What risks is ICP accepting by adopting its focused low-cost strategy?

Customer ratings of products they bought online is an example of

Reach is an especially critical dimension for which firm?

Focus strategies are

Target's brand promise "Expect More. Pay Less" and appeal to higher-income,fashion-conscious discount shoppers illustrates the______strategy.

Walmart's same store sales have been declining and those of rivals Family Dollar and Amazon have been increasing. What could explain this recent change?

The typical risks of a cost leadership strategy include

The integrated cost leadership/differentiation strategy is superior to the other business-level strategies.

An interior decorator has moved his business from Los Angeles to St. Paul,Minnesota,because his spouse's company transferred her to St. Paul. The decorator is distressed because the customers in his target market have,in his words,"banal and bourgeois taste." What is the decorator's problem?

The book The Dyslexic Advantage appeals to a market of educators,people with dyslexia,their friends,family,and coworkers. This is customer segmentation by______factors.

The activities in the value chains of companies using focus strategies are quite different than the activities in the value chains of companies using industry-wide business strategies.

A firm using a(n) Strategy generally needs to operate "below the radar" of larger and more resource rich Firms that serve the broader market.

Wholesome Pet Food has successfully specialized for 20 years in high-quality pet food made from all-natural ingredients and organically raised lamb. This brand has a strong following and is recommended by veterinarians who practice in affluent neighborhoods. Wholesome's main supplier of lamb has announced that the price for lamb will be 15 percent higher next year.

By linking companies with their suppliers,distributors,and customers,provide a company with flexibility.

The risks of a focus strategy include

A cost leadership strategy targets the industry's______customers.

Almost any identifiable human or organizational characteristic can be used to subdivide a market into segments that differ from one another on a given characteristic.

Starbuck's determined that all of the following customer needs were important EXCEPT