Bowmans Strategy Clock
Chapter 6 Business Level Strategy Page 221 – 253 Bowman Strategy Clock Most Important.
Sample Question: ← Identify strategic business units (SBUs) in organizations. ← Explain bases of achieving competitive advantage in terms of ‘routes’ on the strategy clock. ← Assess the extent to which these are likely to provide sustainable competitive advantage. ← Identify strategies suited to hyper-competitive conditions ← Explain the relationship between competition and collaboration ← Employ principles of game theory in relation to competitive strategy
A strategic business unit (SBU) is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU.
Exhibit 6.1 Page 222
A 'no frills' strategy combines a low price, low perceived product/service benefits and a focus on a price-sensitive market segment. These segments might exist for a number of reasons: • The products or services are commodity-like. • There may be price-sensitive customers, who cannot afford, or choose not, to buy better-quality goods. • The buyers have high power and/or low switching costs – so building customer loyalty is difficult – for example with petrol retailing. • Where there are a small number of providers with similar market shares. • Where the major providers are competing on a non-price basis the low price segment may be an opportunity for smaller players to avoid the major competitors.
Exhibit 6.2 Page 225
A low price strategy • Seeks to achieve a lower price than competitors • Maintain similar perceived product or service benefits to those offered by competitors. • SBU Has Two Choices • The first is to try to identify and focus on a market segment that is unattractive to competitors and in this way avoid competitive pressures to erode price. • A more challenging situation is where there is competition on the basis of price. This is a common occurrence in
Sample Question: ← Identify strategic business units (SBUs) in organizations. ← Explain bases of achieving competitive advantage in terms of ‘routes’ on the strategy clock. ← Assess the extent to which these are likely to provide sustainable competitive advantage. ← Identify strategies suited to hyper-competitive conditions ← Explain the relationship between competition and collaboration ← Employ principles of game theory in relation to competitive strategy
A strategic business unit (SBU) is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU.
Exhibit 6.1 Page 222
A 'no frills' strategy combines a low price, low perceived product/service benefits and a focus on a price-sensitive market segment. These segments might exist for a number of reasons: • The products or services are commodity-like. • There may be price-sensitive customers, who cannot afford, or choose not, to buy better-quality goods. • The buyers have high power and/or low switching costs – so building customer loyalty is difficult – for example with petrol retailing. • Where there are a small number of providers with similar market shares. • Where the major providers are competing on a non-price basis the low price segment may be an opportunity for smaller players to avoid the major competitors.
Exhibit 6.2 Page 225
A low price strategy • Seeks to achieve a lower price than competitors • Maintain similar perceived product or service benefits to those offered by competitors. • SBU Has Two Choices • The first is to try to identify and focus on a market segment that is unattractive to competitors and in this way avoid competitive pressures to erode price. • A more challenging situation is where there is competition on the basis of price. This is a common occurrence in