Current Event Exercise (CEE)

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1) Explain how business -level strategy determines a firm’s strategic position
Reading chapter 6 in “Strategic Management” section 6.2 “Explain how business level strategy determines a firm’s strategic position.” I choose this topic, since we are always evaluating our long term “Strategic Business Level Strategic plan. Typically we do this every 4 years within my company, however we were just bought out by a private equity firm in December. According to our text book “Business level strategy details the goal directed actions managers take in their quest for competitive advantage when competing in a single product market” (Rothaermel, F. T. (2021). To formulate a business level strategy we need to answer who are the customer segments we will serve, what customer needs, wishes, and desires we will satisfy, why do we want to satisfy them, and how will we satisfy them. “To achieve a desired strategic position, managers must make strategic trade-offs choices, between a cost or value position” (Rothaermel, F. T. (2021). Using a generic business level strategy there are two fundamental strategic approaches. A differentiation strategy, or a cost leadership to determine a firm’s strategic position. Differentiation and cost leadership require distinct strategic positions, and in turn increase a firm’s chances to gain and sustain a competitive advantage.
I chose several article discussing factors influencing the strategic position of businesses. There were so many sources to choose from that reviewed several articles looking for common themes that are successful in businesses. One of the articles goes into depth what factors should be considered when developing a firms strategic position. They correlates with what the book discussed in chapter 6. “Your brand is a valuable business asset, making it even more important to stay on top of the factors that influence your strategic position” (Factors Influencing The Strategic Position of a Business, n.d.). Looking at Market conditions, competitive shifts, financial forecasts, resource reallocation, and of course the Business strategic planning position. “Positioning is always competitive. Positioning is vital to having a successful marketing strategy and a business growth strategy with the objective to increase company value” (Cabezas, 2014). With a fast changing market, products change, technologies change, competition changes and there is a constant flux. New companies, and companies from other industries, are trying to grab a piece of the action. All of these changes can influence positioning in the marketplace. Standard approaches to positioning are not enough; in fact, they may not necessarily work. To survive in dynamic marketplaces, companies need a new form of positioning.
With a firm finding their strategic position can be difficult, and you need to start with choosing the right strategy. “Figure out when it makes sense to pursue strategies of position, leverage or opportunity” (Furr, n.d.). We also need to understand our circumstances am I am in a stable industry, product life cycles, and expectation of the consumers. Position strategies involve selecting a valuable and unoccupied industry position and then building up its defenses. This is the strategy that is commonly associated with Five Forces analysis, where competitive advantage comes from constructing a fortress around an attractive market.

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