Step 4: Strategy formulation (cont.)
Business strategy
defines the major actions used to build and strengthen competitive position within an industry
low
cost strategy
attempt to be efficient and offer a standard, no frills product
useful for companies that are large and take advantage of economies of scale in production or distribution
organization must be the cost leader in its industry
must offer a product that is acceptable to customers
differentiation strategy-attempt to be unique in its industry or market segment along some dimensions that customers value
position based on high product quality, excellent marketing and distribution, or superior service