BUSI 690, Liberty University: Rothaermel Exercise 2 Analysis

This document presents solutions to various discussion questions from the BUSI 690 course, focusing on concepts from the Rothaermel textbook. It addresses the drawbacks and risks associated with broad generic business strategies and focused strategies, and provides examples of value chains for firms employing cost leadership, differentiation, and value innovation strategies. The assignment also explores the impact of industry life cycles on business strategy, with a case study on Maruti Suzuki. Furthermore, the document examines the use of corporate strategy of diversification by Walmart, analyzes different types of strategic alliances, and discusses global strategy, using Pepsi as an example. The content covers key business strategy concepts, including innovation, competitive advantage, and strategic decision-making.

BUSI 690
LIBERTY UNIVERSITY
ROTHAERMEL EXERCISE 2 INSTRUCTIONS
Discussion Question 6.1
What are some drawbacks and risks to a broad generic business strategy? To a
focused strategy?
There are many services and products covered by the braod strategy, but it doesnot have
one that stands out above all the rest. If the cosumers are not aware of the core
competencies of the firm then that may hurt the consumers. If wesee from the cost
perspective tan it may not be good, if the cost goes up than the value created for the
product might decrease (Furrer, 2016). Along with this if the products are not
differentiated from the products of the other companies than the consumers might shift
towards other company products and that would hamper the consumers of the company
as they would shift towards the other company.
The cost leadership strategy and differentiation are the two generic strategies and both of
them are different from each other, These strategies can be used by any organization
therefore they are referred to asgeneruc strategies. One of the risk associated with the
strategy is low cost because if any other firm is aware of the technique thenthey can also
lower their costs. The risk associated with the differentiation strategy is the limitation by
the competitors and changes in the tastes andpreferences of the customers
Discussion Question 6.3
In Chapter 4, we discussed the internal value chain activities a firm can perform in its
business model (see Exhibit 4.8). The value chain priorities can be quite different for firms
taking different business strategies. Create examples of value chains for three firms: one
using cost leadership, another using differentiation, and a third using value innovation
business-level strategy.
Value of chain is a group of different task that a firm has to perform in order to provide the
valuable products or services to the customers (Enz, 2009).

BUSI 690
• using cost leadership- when a firm try to provide good quality of products by lowering the
cost so that maximum customer is attracted it is known as cost leadership strategy.
Example:- McDonald it provides good quality product and it's a brand so attract number of
customers.
• using differentiation- when a firm tries to make it products different or better from the
competitors product to attract more customers is differentiation.
Example:- Lash and Sephora both are the makeup brands and easily available but less products
are handmade so it makes it different from all other products (Foregang, 2015).
• using value innovation business level strategy:- it's a method to adopt new technologies and
strategies to enhance the product quality and lowering the price as well.
Example:- Amazon online store why not initially used by the people but now they have on the
customers loyality and their business has also expanded.
Chapter 7Rothaermel Text
 Discussion Question 7.1
Business level strategy is an approach that is adopted by business to make it different from the
competitors by providing better products and services and could easily expand the business by
attracting more customers where as corporate strategy of diversification helps the new product to
enter into a new market where the product was not available so when Walmart uses the corporate
strategy of diversification so he Can attract more customers and could easily compete in the
market by providing variety of products with the help of supercentres which he was opening and
will earn a lot of revenue (Saebi, 2017).
 Discussion Question 7.2
Much has been said about competitive advantage gained from innovations such as
the Internet, high-technology gadgets, and apps. The chapter points out, however,

BUSI 690
that low-technology innovations such as the razor—razorblade business model can
also create value with incremental innovation. The chapter also noted that Dollar
Shave Club (Strategy Highlight 7.1) is merely using a different business model to try
to disrupt Gillette. Think of other low-technology innovations that are/were novel,
useful, and successfully implemented so that the innovating firm gained a
competitive advantage. Find information about the entrepreneurial story behind the
innovation.
Any innovations in Technology are always better to adapt as they enhances the living
standard of people. In ancient time people used to cook food at their homes but as their
taste and preferences changed the need for the preserved food or the packed food
demands increased. This was only possible because of their innovations of the frozen
food processing units which can easily preserve food for long duration of time. The new
technologies and the innovation has only given the opportunity to preserve the food and
can be cooked easily at the time when it is needed. Customers are health conscious so
they prefer smart meal group which includes smart diet, soups and juices (Massa, 2011).
The trend of market has changed a lot but has to face competition with in the country and
outside the country as well.
Discussion Question 7.4
Select an industry and consider how the industry life cycle has affected business strategy
for the firms in that industry over time. Detail your answer based on each stage:
introduction, growth, shakeout, maturity, and decline.
Maruti Suzuki India Limited is a publicly tested automaker in india. It deals in four wheelers and
is the maximum car manufacturer. Maruti always studies the customers demand and the products
which the competitors are selling.
• Growth stage:- in this stage the demand of the product increases and the brand is getting a
good preference. In growth stage they have to consider the following steps
Product- they have to maintain good quality products and provide good after sale services.

BUSI 690
Pricing- when the products demand is going up they should maintain the price.
•Shakeout stage- in this stage maximum customers are reached growth of the revenue and profit
start slowing down as industry is reaching to its maturity stage.
•Maturity stage:- it is the stage when sales starts falling at decreasing rate because of
competitors ,like Renault kwid is the competitor of Alto with the same price.
•Decline stage:- it is the stage in which the sale start decreasing in the increasing rate due to
changes in technology or in the customers preference.
Example demand of diesel vehicles increases so the demand of petrol products decreases.
Chapter 8Rothaermel Text
Discussion Question 8.1
When Walmart decided to incorporate grocery stores into some locations and created
“supercenters,” was this a business-level strategy of differentiation or a corporate strategy
of diversification? Why? Explain your answer.
The business level strategy is the strategy that has the main concentration of gaining the
competitive advantage in a single product line whereas the corporate level strategy is the decson
that is amdeby te senior level mangemenet and the company to gain te competitive advantage in
various markets and industries simultaneously. The Walmart decided to of incorporating various
grocorey stores in different locations along with creating various supercentres , so here it can be
considered as a corporate level strategy of Walmart, as the company was deciding to gain
competitive advantage in various industries and market and was not concentrating in a single
product line (Masanell, 2010).
Chapter 9Rothaermel Text
 Discussion Question 9.1
The chapter identifies three governing mechanisms for strategic alliances: non-equity,

BUSI 690
equity, and joint venture. List the benefits and downsides for each of these mechanisms.
Strategic Alliance is a mutual agreement between two or more parties, so that both parties can
assist Each Other by sharing the technology resources and capabilities which they are having and
could easily developed better products and services. These alliances help the firms to fight
against the threats and grasp the new opportunities. It also help the forms to enter into the
foreign market and create their own position.
First strategic Alliance is non equity when two or more companies come together to share their
resources for the best possible output is non equity. This is usually for the short time period and
it is less reliable and less flexible.
Second Alliance is equity Alliance where a company purchases the equity of another company
then the kind of contract is created between them and it is a long term dealing and more reliable
as compared to non equity Alliance.
Third Alliance is joint venture where the parent company built new smaller companies to expand
their business and attract the new customers by opening small companies in different markets. It
requires huge investment, resources and requires lot of planning and manpower.
Chapter 10Rothaermel Text
 Discussion Question 10.3
3. The chapter notes that global strategy can change over time for a firm. MTV is
highlighted as one example in Exhibit 10.7. Conduct a web search of a firm you know to
be operating internationally and determine its current global strategy position. How long
has the firm stayed with this approach? Can you find evidence it had a different global
strategy earlier?
Actions which are taken by the organisation to achieve the objective all the goals which are
already set it up by the management are called strategies. Global strategy refers to the plans in
which the product is exported to other countries to gain the market beyond their boundaries,

BUSI 690
which leads to brand popularity and get new customers but it is very difficult to get the place in
the international market as the existing products have already maintained good reputation
within that boundary.
Example Pepsi is a popular cold drink all over the world it is having Lays as other product
which is also very popular in India, but in UK Walkers Crisf was having own reputation so the
Lays product was not exported in that area, as Walker crisf was having own reputation so
didn't want to hamper that market. As more amount of resources would be needed to make this
product popular.
In same way Coca-Cola a good brand in cold drinks has taken a lot of time to get its place in
the market.

BUSI 690
Bibliography
Enz, C. (2009). Hospitality Strategic Management: Concepts and Cases - Page 18. London: Springer
Publications.
Foregang, W. (2015). Strategy-specific Decision Making: A Guide for Executing Competitive Advantage.
London: Pearsons Publications.
Furrer, O. (2016). Corporate Level Strategy: Theory and Applications - Page-2. New York: Cengage
Publications.
Masanell, C. (2010). From strategy to business models and onto tactics. Long Range Planning , 10-15.
Massa, A. (2011). The business model: recent developments and future research. Journal of
Management , 10-15.
Saebi, F. (2017). Fifteen years of research on business model innovation: How far have we come, and
where should we go? Journal of Management , 20-25.