Strategic Management and Leadership Assignment
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Added on 2020-03-16
Strategic Management and Leadership Assignment
Added on 2020-03-16
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Running head: Strategic management and leadership Strategic management and leadership
Strategic management and leadership The report talks about the business level strategies of a company in order to achieve its target andget a profit in the business. The report describes the definition of business level strategy andtypes of this strategy. It also explains the significance of business level strategy. It explains thevarious business level strategies such as cost leadership, differentiation, and focus strategies. Thebusiness level strategy is considered as a firm position in an organization. These strategies helpto obtain and gain sustainable competitive advantages. The business level strategies describe as adetail action which provides value to the customers and it also helps to gain competitiveadvantages by exploiting core values and competencies. These strategies help to identify andanalyze the customer needs, wants and requirements. Strategic management process is a process that describes the organizational strategies. It is acontinuing process in which the firm decides to implement and execute few selected effectivestrategies in the organization to meet the long-term goals and objectives. Michael Porter hasdeveloped a generic strategic model to gain the competitive advantages in the market. Mainlyporter focuses on the three core strategies cost leadership, differentiation and focus strategies.The business level strategies play a significant role in every business and trade. According toGeorge &Bock (2011), the business level strategy is a process of decision-making at the strategicbusiness unit level. It identifies and evaluates that how strategic business unit guides andsupports organizational goals and objectives (Boons, Montalvo, Quist & Wagner, 2013). Thisstrategy focuses on the specific market, product line and buyer which may show in differentforms. The aim of this strategy is to gain the competitive advantages in the market. This strategymonitors and focuses on the business units’ products and competitive position of the companywithin the specific industry and market segment. To diversify the business, the associationcreates various business units in the market. It supports and helps to establish competitivebenefits among the competitors across the world and it also helps to reduce the cost ofproduction. It develops innovation and modernization with the help of the company (Bocken,Short, Rana & Evans, 2014). 2
Strategic management and leadership Business Level Strategies are the strategies that are made in an organization for betterfunctioning. It creates a difference between the two competing companies according to thepositions. To achieve greater heights what activities to perform to achieve those heights. In abusiness, every firm has to plan the best strategies as compared to its competitors. The businessstrategy is a blueprint which shows concern towards the customer by meeting their satisfactionand also thinking about its own position to achieve greater advantage then the competitors(Onetti, Zucchella, Jones & McDougall-Covin, 2012).After various researches, it has been studied by the George & Bock (2011) that business levelstrategy is important to achieve the long-term goals and objectives of the firm. The business levelstrategy focuses and monitors on the needs, requirements, and expectations of the customers inorder to gain average returns. This strategy is related to the five forces of competition andcompetitors. This strategy provides value to customers and gains competitive benefits byexploiting core values and competencies in individual and specific product markets. In businesslevel strategy, top management and managers will have to find a right balance between thequality and prices in order to gain revenue and profits. The various business level strategies havebeen discussed below (Zott, Amit & Massa, 2011). The business level strategy based on the price and cost leadership. The cost is based on internalefficiency in order to maintain sustainability in the market. It is the strategy which monitors andevaluates the strategies executed in the association to reduce the cost of product and services inthe market (Boons & Lüdeke-Freund, 2013). It helps to differentiate its products in the market onthe basis of low prices and cost. The cost of goods is based on the internal efficiency andproductivity of the company. In this strategy, the profit margin is managed by the topmanagement of the firm. In the 1970s the cost leadership strategy was universal and common.The low-cost strategy provides various advantages to the company and people as well. Further,the porter five forces model also plays a significant role in business level strategy. It includes therivalry, customers, suppliers, new entrants, and substitutes. Under the cost leadership strategy,standardized and good quality of products is provided to the customers with the lower prices andcost. It also helps to reduce the competition in the market. Many companies apply this strategy intheir management by executing the complex organizational system within the organization. It3
Strategic management and leadership also controls on the prices of products by minimizing and reducing the various expenses andcosts in the market (Wollard & Shuck, 2011). Cost leadership strategy is completely based on the price which prevails in a competitive market.It relates to the competing factor. A customer tries to reduce the type of cost structure of thecommodity. They do so to make the value of the price relatively less. Producers are responsiblefor managing the price and value of the commodity. Cost leadership is efficient internally. Thishelps in sustaining the margins. In cost leadership strategy, companies are known for its lowprices and higher growth returns. The cost of the product depends on the producers. The costleadership in critical terms is a concept which is used while making strategies in business. It is away which creates competition between the companies. Cost leadership refers to the cost ofoperation in the industry at low cost (Drnevich & Croson, 2013).It has been studied that rivalry plays a vital role in business level strategy. In this strategy, theassociation does not prefer the initiate prices of the products. Boons & Lüdeke-Freund (2013)believed that the main reason behind of the companies of achieving success is that the lower costof operations than those who operate in the same business. It means that they offer thecompany’s product at a low price to compete with other companies by reducing the cost. In thestock of similar products, customers choose the product which has the lowest price. Customersare always in search of goods and services at a low cost and company’s competitive attitudeallows them to meet those services. By gaining a large number of customers they are able tobecome the leaders in the industry. This becomes the path of winning for the company. Bryman& Bell ( 2015) says, Cost Leadership is simple but it is not easy. With such price, a cost leader isable to meet the target than that of a competitor. Cost leaders usually win as they deal withmainly the price. This makes the company profitable. This makes it innovative and makes themsurvive with the competitors on a low margin. They try to reduce the cost and just not the prices.The differentiation business level strategy is also unique and excellent. It provides unique andgood quality of products and services to customers in the market. There are various ways todifferentiate the several products and services such as features, dealer network, design, andcustomer service. By using the differentiating strategy, the company can generate uniquecircumstances and conditions for their competitors and buyers. Further, the company isproducing unique and effective products and services to attract the more customers in the market.4
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