The document discusses business level strategies and integrated or hybrid strategies. It begins with recapping business level strategies which aim to improve a company's effectiveness, efficiency, quality, innovation and customer responsiveness through cost leadership, differentiation strategies, or a combination. It then discusses integrated or hybrid strategies that simultaneously pursue both cost leadership and differentiation to deliver enhanced customer benefits at a low price while achieving sufficient margins. Examples like Toyota, Canon and Honda are provided that successfully employ a hybrid strategy. The summary concludes by stating the hybrid strategy may become a new trend and further research is needed to investigate its implementation.

1. 1
BUSINESS LEVEL
STRATEGIES…
CREATING STRATEGIC MIND SET
(cont’d…)

2. TASKS
2
• I - QUICK RECAP
• II - BUSINESS STRATEGY (INTEGRATED)
• III - SUMMARY
• IV - EXERCISE/ ASSIGNMENT

3. RECAP
■ WHY ???
■ WHEN ???
■ WHAT ???
STRATEGY
3

4. WHY ???

5. 5
WHEN ???
Triggering
event
•New CEO
•External intervention
•Threat of change in
ownership
•Performance gap
•Strategic inflection
point
Stimulus
for
change
in
strategy
INITIATION OF STRATEGY

6. WHAT ???

7. 7
BUSINESS LEVEL STRATEGY
• Firm-specific business model
• Allows a company to gain competitive advantage
• Aims at improving company’s
 effectiveness
 efficiency
 Quality thru
 innovation
 customer responsiveness
Cost
Ldrshp &
or Diffrn
Strats

8. COST
&
UNIQUENESS
MAX
MIN

9. 10
Distinctive Competencies…
They are firm specific strengths that allow a
company to differentiate its products and/or
achieve substantially lower costs than its rivals
and thus gain a competitive advantage.
E.g. Toyota…
They arise from two sources:
1) Resources
2) Capabilities

10. 11
RESOURCES
DISTINCTIVE
COMPETENCIES
CAPABILITIES
BUSINESS
STRATEGIES
Superior:
•Efficiency
•Quality
•Innovation
•Customer
responsiveness
Differentiation
Low cost
Value
creation
profitability
Build
Build

11. 12
Competitive positioning and
business – level strategy
■ Strategic group Analysis
■ Investment Analysis
■ Game Theory

12. 13
Strategic group Analysis
■ Strategic group analysis helps a company identify the
strategies that its industry rivals are pursuing.
■ It allows managers to uncover the most important basis
of competition in an industry and identify products and
market segments where they can compete most
successfully for customers.
■ Such analysis also helps to reveal what competencies are
likely to be most valuable in the future so that companies
can make the right investment decision.

13. 14
Investment Analysis
■ An Investment Strategy sets the amount and type of
resources – human, financial and functional – that
must be invested to maximize a company’s
profitability over time.
■ Two factors are crucial in choosing an investment
strategy:
■ The strength of a company’s position in an industry relative
to its competitors.
■ The stage of the industry’s life cycle in which the company
is competing.

14. 15
Game Theory
■ Game such as chess, player move in turn, and
one player can select a strategy to pursue after
considering its rival’s choice of strategies or
the players act at the same time, in ignorance
of their rival’s current action.

15. 16
Business Level Strategies Help To
Improve
1.Efficiency
2.Quality
3.Innovation
4.Customer responsiveness

16. 17
Stages of the Industry Life Cycle
Generic
strategies
Differentiation Differentiation Differentiation
Overall cost
Overall cost leadership
leadership Focus
Market
growth rate
Low Very large Low to Negative
moderate
Number of
segments
Very few Some Many Few
Intensity of
competition
Low Increasing Very intense Changing
Emphasis on
product
design
Very high High Low to Low
moderate
Stage
Introduction Growth MaturityDecline
Factor

17. 18
Stages of the Industry Life Cycle
Emphasis on
process
design
Low Low to High Low
moderate
Major
functional
area(s) of
concern
Research and Sales and Production
General
Development marketing management
and finance
Overall
objective
Increase Create Defend Consolidate,
market share consumer market share
maintain,
awareness demand and extend harvest, or
product life exit
cycles
Stage
Factor
Introduction Growth MaturityDecline

18. 19
Evaluation and Control
Traditional
Financial
Measures
Return on
Investment
(ROI)
Earnings per
Share
(EPS)
Return on
Equity
(ROE)

19. 20
THANK YOU.

20. INTEGRATED/HYBRID STRATEGY
■ A combination competitive strategy - involving high level of
emphasis on both cost-leadership and differentiation
strategies simultaneously
■ Seeks simultaneously to achieve differentiation and low
price relative to competitors
■ Deliver enhanced benefits to the customers with low price
while achieving sufficient margins to reinvest, maintain and
develop bases of differentiation

21. 22
Tesco supermarket (Strategy Explorer, 2010)
INTEGRATED/HYBRID STRATEGY

22. NEED ANALYSIS
23
 Increase in global competition
 Produce products with differentiated features or
characteristics that customers value
 Provide these differentiated products at a low cost,
compared to competitors’ products
 Improve ability to adapt quickly to environmental changes
 Learn new skills and technologies
 Leverage core competencies across business units and
product lines more effectively

23. MERITS
24
• Will generate superior incremental performance as
compared to single competitive strategies.
• Multiple sources of competitive advantage (e.g., economies
of scale and brand/customer loyalty) as compared to
advantages gained through pursuit of single competitive
strategies.
• Achieve a low-cost position by emphasizing efficiency in their
value creating activities, thereby further strengthening their
competitive position vis-a-vis their rivals.

24. SUCCESS STORIES
25
Toyota
Canon
Honda
simultaneous pursuit of cost leadership and differentiation
strategies

25. SUMMARY OF APPLICATION
26
Business
Strategy
Where has the
strategy been applied
Example of
Products/Services
Cost Leadership Developing, transition and
developed economies
(Worldwide)
Cars industry (Toyota), Airline
business (Air Asia), Retail
business (Giant and Carrefour
Supermarket)
Differentiation Developing, transition and
developed economies
(Worldwide)
Cars and Motor cycle ( Mercedes
Benz and Harley Davidson - by
Brand) Watches (Titan Watches -
by design) Domino Pizza (by
positioning) Apple Computers (by
technology) 3M (by Innovation)
Hybrid (Combination
of Cost Leadership
and Differentiation
strategy)
Developing, transition and
developed economies
(Worldwide)
Car Industry (Toyota, Honda)
Furniture Industry (IKEA)

26. CONCLUSION
27
• Will the hybrid strategy become a new trend of
competitive strategy in the business world? ? ?
• This question needs further research and investigation
into the theory of hybrid strategy and its implementation
strategies for process and system development in the
business companies.

27. • 2 nd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
RESEARCH (2nd ICBER 2011) PROCEEDING
• Acquaah, M. & Yasai-Ardekani, M. (2006) - Does the implementation of a
combination competitive strategy yield incremental performance benefit? Journal
of Business Research 61, 346 – 354.
• Allen, R.S. & Helms, M.M. (2006) - Linking Strategic Practices and Organizational
Performance to Porter’s Generic Strategies. Business Process management 12
(4), 433-454. Anderer, M. (1997).
• Achieving Superior Financial Performance in China - Differentiation, Cost
Leadership or Both? American Marketing Association, Journal of International
Marketing, Vol. 16(3), 1-22.
• Daan Assen’s Learning, (2010) - Hybrid strategy: sustainable competitive
advantage. http://www.daanassen.com/hybrid-strategy-sustainable-competitive-
advantage (3 Jan, 2011).
• Gopalakrishna P. & Subramanian, R. (2001). Revisiting the Pure versus Hybrid
Dilemma: Porter’s Generic Strategies in Developing Economy. Journal of Global
Marketing Vol.15 (2), 61-79.
• Miller, D. (1992). Generic strategies - classification, combination and context. In:
Srivastava, P. (Ed), Advances in Strategic Management, Vol. 8. Jai Press,
Greenwich/CT, 391-408.
REFERENCES

28. EXERCISE