Business Level Strategies

Resource similarity and market commonality are variables to examine in evaluating the
determinants of Apple's success over its competitors. Apple does not pay much attention to its
competitors and has never provided an opportunity to other businesses to change its method of
operation and production. Through these methods, Apple leads companies for quality products
and overall performance (Tracy, 2015). Some businesses attempt to create comparable goods to
those of Apple Inc. to boost their sales. For example, the Apple iPod and Phones are in demand
worldwide despite the intense competition from other businesses.
What are the further measures that Apple's rivals are expected to take? Apple's competitors may
attempt to enter the market with cheap price goods similar to Apple's products.
For example, Samsung is making noticeable attempts to defeating Apple by coming out with
quality goods such as Samsung Galaxy Note II that imitates an iPhone in the way it works.
The rivals are fond of reacting to Apple goods every time a new one is launched in the market.
Some of the strategies used are
1. Low-cost-leadership
This approach is for companies who wish to compete on pricing. This strategy's results are
misunderstood. No. Internal efficiency must be continuously improved to ensure above-average
returns and the lowest pricing. The common cost-cutting approach includes:
Strict cost control
Improving technology to manufacture at scale and cheap cost. This approach works well when
your product or service is standard.

Defences
Cost leadership may assist your company fight Porter's five forces:
Rivalry: Cost leadership implies you can still earn money after your rivals have.
Cost leaders may tolerate more significant cost increases before passing them on to suppliers.
Buyers: Competitive markets push you to offer goods at ever-lower prices. But this may drive
rivals out of the market. If this occurs, your consumers lose purchasing power, and you become a
monopoly.
Newcomers: By operating at scale and always focusing on cost reduction, you block newcomers.
Substitutes: Lowest cost sales create loyal consumers.
Cost leadership
Amazon is a company that uses a cost leadership approach.
It aims to attract a significant number of clients. It maintains costs low by purchasing bulk goods
at low prices. This is coupled with no physical shops and cutting-edge delivery systems to save
customers money while maintaining solid profits.
Risks By focusing on cost reduction, you may miss out on what your consumers want.
New technology may reduce costs and therefore remove a competitive edge.
2. Distinguishing
This approach is for businesses that desire a diverse client base. This approach often focuses on
developing distinctive characteristics to succeed in the market. They typically demand a more
significant premium to compensate for being outstanding.
Defences
Differentiation can assist your company fight Porter's five forces.
Brand loyalty and distinctiveness may keep rivals away.
Suppliers: A higher price implies you can withstand cost rises easier.
The power of purchasers is restricted since they can't obtain what you offer elsewhere.
Brand loyalty and distinctiveness keep consumers from switching.
Customers are unable to transfer brands due to brand loyalty and distinctiveness.
Distinction Strategy Example
Apple uses a differentiation approach to sell laptops to a broad market. Their distinct design and
engineering set them apart in the market.
This allows them to charge a premium and compete.
Risks
Customers may conclude that your distinctiveness isn't worth the extra cost.
Competitors may copy some of your distinctive characteristics, reducing your originality.
3. A Focused Cost Leadership Strategy
These businesses compete on pricing but also serve a specialized clientele.
Focusing on a limited set of clients is one way to implement a targeted cost leadership approach.
Understanding your niche market's requirements allows you to reduce expenses uniquely.
Defences
Like broad cost leadership, focused cost leadership may help protect your company against
Porter's five forces.
Exemplified Cost Leadership
Checkers is a drive-in only US fast-food chain. It saves money since it doesn't have to pay for
client seating, and its facilities are cheaper to build. Checkers targets the bargain market. Despite
this, Checkers may generate large profits due to minimal overhead.
Risks
Large market companies with substantial economies of scale may target your speciality.
Your rivals may subdivide your niche.
4. Targeted Differentiation
This approach is quite similar to differentiation, but it targets a particular market niche. These
businesses compete by targeting a niche market.

Focusing mechanisms include:
Pick a lucrative niche market segment.
Focus on low-competition regions.
Concentrate on a difficult-to-replace section.
Defences
Firms with a targeted differentiation strategy can protect themselves against Porter's 5 Forces just
as businesses with a comprehensive differentiation strategy.
Focused Distinction
A business like Rolls Royce has a targeted differentiation approach. Their vehicles exude
grandeur, luxury, and technical brilliance Pricey and targeting a small segment of the global
automobile industry,
Risks
Larger market companies may target your speciality.
Your rivals may subdivide your niche.
5. Cost Leadership/Difference Strategy
A low-cost product with unique characteristics is produced. This approach focuses on two
competitive advantages: cost and distinctiveness. This approach is also known as a hybrid
strategy.
A mid-priced product that stands out from the crowd may be more attractive to consumers than a
low-cost generic offering.
This is a risky approach since you must invest in cost reduction (via automation, etc.) and
product differentiation.
References
Jones, G. R., & Butler, J. E. (1988). Costs, revenue, and business-level strategy. Academy of
Management Review, 13(2), 202-213.
Chrisman, J. J., Hofer, C. W., & Boulton, W. B. (1988). Toward a system for classifying
business strategies. Academy of Management Review, 13(3), 413-428.
Jones, G. R., & Butler, J. E. (1988). Costs, revenue, and business-level strategy. Academy of
Management Review, 13(2), 202-213.

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Resource similarity and market commonality are variables to examine in evaluating the

worldwide despite the intense competition from other businesses.

Some of the strategies used are

misunderstood. No. Internal efficiency must be continuously improved to ensure above-average

Strict cost control

your product or service is standard.

Substitutes: Lowest cost sales create loyal consumers.

Amazon is a company that uses a cost leadership approach.

customers money while maintaining solid profits.

significant premium to compensate for being outstanding.

Differentiation can assist your company fight Porter's five forces.

Brand loyalty and distinctiveness may keep rivals away.

Brand loyalty and distinctiveness keep consumers from switching.

Distinction Strategy Example

engineering set them apart in the market.

This allows them to charge a premium and compete.

These businesses compete on pricing but also serve a specialized clientele.

Porter's five forces.

Exemplified Cost Leadership

this, Checkers may generate large profits due to minimal overhead.

Your rivals may subdivide your niche.

businesses compete by targeting a niche market.

Pick a lucrative niche market segment.

Focus on low-competition regions.

Concentrate on a difficult-to-replace section.

as businesses with a comprehensive differentiation strategy.

Larger market companies may target your speciality.

Your rivals may subdivide your niche.

5. Cost Leadership/Difference Strategy

low-cost generic offering.

Management Review, 13(2), 202-213.

business strategies. Academy of Management Review, 13(3), 413-428.

Management Review, 13(2), 202-213.

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