Individual assignment

Base on your understanding, write an essay about the similarities and differences between business level strategy and corporate level strategy. Give some suitable examples to illustrate.

Trần Bình Minh­EBBA 10.3­11183380 Individual assignment Topic:   Base   on   your   understanding,   write   an   essay   about   the   similarities   and   differences   between   business   level   strategy   and   corporate   level   strategy   Give   some suitable examples to illustrate I, Definition  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   It   deals   with   strategic   decisions  concerning the choice of product, competitive advantage, customer satisfaction,  etc   Normally,   to   set   out   a   business­level   strategy,   manager   need   to   answer   3  question  Who: Determine the customer serve What: Determine what customer to satisfy How: Determining core competencies to Satisfy Customer need  On   the   contrary,  Corporate   level   strategy  (Companywide)   is   concerned  with   the   overall   objective   and   scope   of   business   to   fulfil   stakeholder’s  expectations. They are specified actions taken by the firm to gain a competitive  advantage by selecting and managing a group of different businesses competing in  different product markets. The questions below are the main concerns of a manager  when he/she have to draw out a corporate­level strategy The degree to which the businesses in the portfolio are worth more under the  management of the firm that they would be under other ownership? What businesses should the firm be involved in? How should the corporate office manage the group of businesses? II, Similarity Regarding   the   similarities   There   are   two   major   similarities   First,   both  strategies aim is to maximize the profit of shareholders by create more value, bring  about   more   consumers   Second,   these   strategies   both   have   an   effect   on   the  structure of how a company operate. For example, in business­level strategy, to  secure the most profitable gain while incurring the lowest cost, a firm must tailor  its operating system to achieve efficiency while in corporate­level strategy, they  need to construct their business portfolios properly, building them in a way that  they could work closely to share information, technology, knowledge so that they  reach the economies of scope thus minimize the cost and risk III. Difference Criteria Purpose Business­level strategy  Business­level strategy sole  purpose is to strengthen the  overall performance of the  enterprise Corporate­level strategy Corporate­level strategy is mentioned  the mission statement, which explains  the business type and ultimate goal of  the firm Created by Middle level management Top level management Scale  Specific decision on executive  ,governing business units or  divisions Decision that dictate the direction of  the business as a whole organization Term Short term strategy Long term strategy Focus Competing successfully in the  marketplace Maximizing profitability and business  growth Approach Focus on internal forces within  Developed in response to external  the firm.  environments Major  strategies (Focus) cost leadership Expansion  (Focus) differentiation Stability  Integrated cost  leadership/differentiation Retrenchment IV. Example  Business­level strategy: A gourmet candy company decide that it cannot compete  on price since larger corporations often enjoy economies of scale that drive costs  low   So  instead   of   competing   directly   with   them,   it  would   choose   to   follow   a  differentiation   strategy,   emphasizing   on   freshness,   quality   ingredients   or   some  other attributes that consumers will value them highly enough to pay extra. As a  result, the change in business strategy will affect its functional decisions such as  the selection of its promotions and distribution channels Corporate­level strategy: The owner of the above business determine to diversify  her business into raisin producing. She believe her mail­order candy distribution  system can be perfectly used for the dried­fruit business and that the company’s  existing customer might purchase items from both companies