2.  Business Level Strategies are the course of action adopted by an organization for each of its businesses separately, to serve identified customer groups & provide value to the customer by satisfaction of their needs  In the process, the organization uses its competencies to gain, sustain & enhance its strategic or competitive advantage  The source of competitive advantage for any business operating in an industry arises from the skillful use of its core competencies

3.  According to Porter, the dynamic factors that determine the choice of a competitive strategy are---- 1. Industry Structure:  According to Porter, industry structure is determined by the five competitive forces 2. Positioning of Firm in Industry:  Porter considers positioning as the overall approach of the firm towards competing  It is designed to gain a sustainable competitive advantage & is based on two variables---- Competitive Advantage & Competitive Scope

4. D Competitive Scope Broad target Narrow target Cost Leadership Differentiation Focussed Cost Leadership Focussed Differentiation Low Cost Product/Services Differentiated Products/ Services Competitive Advantage

5.  When the competitive advantage of an organization lies in its lower cost of products or services relative to what the competitors have to offer, it is termed as cost leadership  When all organizations offer products at a comparable price, the cost leader organization earns higher profit owing to the low cost of its products  Cost leadership offers a margin of flexibility to the organization to lower the price if the competition becomes stiff & yet earn more or less the same level of profit

6.  Several actions could be taken for achieving cost leadership------  Accurate demand forecasting & higher capacity utilization is essential to realize cost advantage  Attaining economies of scale leads to lower per unit cost  Aiming at the average customers makes it possible to offer a generalized set of utilities in a product/service to cover greater number of customers

7.  Price based competition is vigorous, making costs an important factor  The product/service is standardized & its consumption takes place in such a manner that differentiation is superfluous  The buyers may be large & possess a significant bargaining power to negotiate a price reduction from supplying organization  There is lesser customer loyalty & the cost of switching from one seller to another is low

8.  When the competitive advantage of an organization lies in special features incorporated into the product/service which is demanded by the customers, who are willing to pay for it, then the strategy adopted is the differentiation business strategy  Customers prefer a differentiated product/service when it offers them utility that they value & thus are willing to pay more for getting such a utility  A differentiator organization can charge a premium price for its products/services

9.  Measures that a differentiator organization can adopt are---- 1. Can incorporate features that offer utility for customers & match their tastes & preferences 2. Can incorporate features that lower the overall cost for the buyer in using the product/ service 3. Can incorporate features that raise the performance of the product

10.  It essentially relies on either cost leadership or differentiation, but cater to a narrow segment of the total market  Therefore, focus strategies are niche strategies  Commonly used bases for identifying customer groups are the demographic characteristics, geographic segmentation or life style etc.  For the identified market segment, a focussed organization uses either the lower cost or differentiation strategy

11.  Focus is essentially concerned with identifying a narrow target in terms of markets & customers  Measures adopted by focussed organizations are- --- 1. Choosing specific niches by identifying gaps not covered by cost leaders & differentiators 2. Creating superior skills for catering to such niche markets 3. Creating superior efficiency for serving such niche markets 4. Achieving lower cost/differentiation compared to competitors 5. Developing innovative ways in managing the value chain