Business Strategy
         Chapter 8
    McGraw-Hill/Irwin                           Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
  Learning Objectives
    1. Determine why a business would choose a low-
        cost, differentiation, or speed-based strategy
    2. Explain the nature and value of a market focus 
        strategy
    3. Illustrate how a firm can pursue both low-cost 
        and differentiation strategies
    4. Identify requirements for business success at 
        different stages of industry evolution
    5. Determine good business strategies in 
        fragmented and global industries
    6. Decide when a business should diversify
                                                         8-3
  Evaluating and Choosing Business Strategies: Seeking 
  Sustained Competitive Advantage 
       The two most prominent sources of 
           competitive advantage can be found in 
           the business’s cost structure and its 
           ability to differentiate the business 
           from competitors 
       Businesses that have one or more 
           sources/capabilities that let them 
           operate at a lower cost will 
           consistently outperform their
           rivals that don’t 
                                                                           8-4
  Evaluating Cost Leadership Opportunities 
       Business success built on cost leadership 
          requires the business to be able to 
          provide its product or service at a cost 
          below what its competitors can achieve
                                                         8-5
  Ex. 8.2  Evaluating a Business’s Cost Leadership Opportunities
                                                                          8-6