For the following questions, illustrate your answers with industry and company e

ID: 412153 • Letter: F

Question

For the following questions, illustrate your answers with industry and company examples. You may wish to draw from the popular business press such as the WSJ, etc 1. Pick a competitive business-level strategy as discussed in Porter's generic strategy typology. Using:a firm with which you are familiar, (a) Describe the strategy in detail, along with its advantages and risks, and (b) discuss how this strategy can help a firm to mitigate each of the five forces in an industry and allow a firm to earn above-average returns in spite of strong competitive forces. 2. Two views of why some firms outperform others are the industrial-organization (IO) and resource-based views of performance. Compare and contrast these views. Describe in detail the steps involved with each model, and also discuss the basic assumptions that make each view unique. Finally, provide industry/company examples reflecting when each might be more appropriate. 3. Describe the segments of the general (remote) environment, and discuss with examples how environmental trends may affect some industries for the better and others for the worse 4. What are the five categories of businesses based on level of diversification? Also, using industry/company examples, what are some tradeoffs between lower and higher levels of diversification? 5. a) What factors affect the likelihood a firm will take a competitive action? b) What factors affect the likelihood a firm will initiate a competitive response to the action taken by a competitor? 6. According to the resource-based view of the firm, internal resources can be instrumental in attaining a sustainable competitive advantage. Using company examples, describe the various types of firm resources. Also, describe the specific criteria managers can use to decide which resources/capabilities have the potential to create a sustainable competitive advantage 7. Describe how diversified firms can use activity sharing and transfer of core competencies to create value, and also how an unrelated diversification strategy can create value.

Explanation / Answer

The company selected for the discussion is Microsoft and its product Windows OS in the market. The business level strategy as per the Porter’s generic strategy is integrated cost leadership and differentiation strategy. The company launches different versions or editions of the one particular Windows operating system such as home edition or business edition or Basic edition. Each edition or version comes with few exclusive features only present in that version that brings differentiation and a point of competitive advantage in the market. Further, the company has also launched the product foe single user, cutting the price to the lower level or multi-user edition for the big business houses. It also makes the product to have the pricing advantage to the company and it can thwart the competition from any other Operating system. The popularity of the Windows OS has led the other competitors such as Apple to come up with their computer products that are compatible with the Windows OS. It brings the advantages such as:

1. Bigger market share

2. High value proposition among the target audience

3. Increase in the market power in the business place

4. Benefits of learning curve in cost efficiency

Though there are few risks also such as erosion of market share by the new entrants, stringent demand of regulatory agencies and consolidation of smaller players in the market.

The five forces are suppliers, buyers, presence of substitutes, new entrants and competitive rivalry.

The product Windows OS is very popular and it is an application to be written on the DVDs and other packaging materials. These stuffs are provided by the different suppliers. So, bargaining power of the supplier is already at the lower level than the organization. The higher market share and habitual tendencies to use Windows OS since childhood has also weakened the bargaining power of the buyers. Consumers cannot get the same features in that price in other alternatives. So, bargaining power of the consumer is also at a lower level. There are substitutes such as Mac OS or Linux, but for computers these OS are in less demand in comparison to the Windows OS. Besides, these substitutes can either come at a cost, or bound to the particular machine model or does not provide the same features as that of the Windows OS. So, the challenges posed by these substitutes can be thwarted by the Windows OS.

Since the product has the business strategy having cost leadership and economy of scale to reduce the price, so new entrants cannot compete or displace the Windows OS. It is the reason the any formidable challenger to the Windows OS is yet to come. There is a competitive rivalry, but the Windows OS has the competitive advantages such as user friendly features, extensive uses and availability in different versions with different price. So, it suits to the pocket of everyone.

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For the following questions, illustrate your answers with industry and company e

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