Prof. Asad Hassan Butt
An action managers take to attain a goal of an
Wal Mart’s low cost strategy
Advantage obtained when a firm outperforms its rivals. (e.g.
Dell low cost structure)
A unique strength that rivals lack (Dell online selling globally)
Sustainable competitive advantage
A distinctive competency that rivals cannot easily match or
imitate. (e.g. Dell’s supply chain management)
barrier to imitation
Factors that make it difficult for a firm to imitate the
competitive position of a rival. (e.g. Microsoft Office)
Prior investments in a particular way of doing business that are
difficult to change and limit a firm’s ability to imitate a
successful rival. (e.g. If HP wants to shift from retail selling to
direct selling would be difficult)
(followed by a diagram)
Strategy concerned with deciding how a firm should
compete in the industries in which it has elected to
Focusing managerial energy and attention on doing
everything possible to lower the costs of the
economies of scale
Cost advantages derived from a large sales volume.
Increasing the value of a product offering in the eyes
Activities having to do with the design, creation,
and delivery of the product; its marketing; and
its support and after-sale service.
Activities that provide inputs that allow the
primary activities to occur.
Moving upstream into businesses that supply
inputs to a firm’s core business or downstream
into businesses that use the outputs of the firm’s
Dell Upstream: Manufacturing its own microchips.
Apple downstream: Developing its retail stores
Entry into new business areas.
Diversification into a business related to the existing business
activities of an enterprise by distinct similarities in one or
more activities in the value chain. E.g. Microsoft XBOX
Diversification into a business not related to the existing
business activities of an enterprise by distinct similarities in
one or more activities in the value chain. E.g. GE into network
economies of scope
Cost reductions associated with sharing resources across
businesses. E.g. Procter & Gamble