Rothaermal Exercise 2 Ryan Cherry BUSI 690 – Policy and Strategy in Global Competition January 25, 2015
Chapter 6 Discussion Question 6.1: What are some drawbacks and risks to a broad generic business strategy? To a focused strategy? The two generic business strategies are differentiation and cost-leadership strategies, and they are fundamentally different from one another, both with their own drawbacks and risks (Rothaermel, 2013). These strategies are referred to as “generic” because they may be used by any type of organization (Rothaermel, 2013). The drawbacks and risks of a differentiation generic strategy is its viability “is severely undermined when the focus of competition shifts to price rather than value-creating In regard to its design efforts, HP has improved “the differential appeal of its product and service offerings” (Rothaermel, 2013, p. 162). Chapter 7 Discussion Question 7.1: What strategy might the firm use to unseat Windows in this market? Although the small firm has developed a new product, it is a product which will be introduced into an industry which is most likely in the growth or maturity stage of the industry life cycle (Rothaermel, 2013). As such, the small firm’s best strategy would be to employ a cost-leadership strategy (Rothaermel, 2013). This is the best option because both the differentiation and cost-leadership strategy are viable options during the growth stage, but firms that adopt the cost-leadership strategy which dominate during the maturity stage (Rothaermel, 2013). The small firm’s new product is likely considered a process innovation, as it seeks to accomplish the same tasks in a more efficient manner (Rothaermel, 2013). Discussion Question 7.2: How does the industry life cycle affect business strategy? Detail your answer based on each stage: introduction, growth, maturity, and decline. During the introduction stage of the industry life cycle, the companies which tend to be, and stay successful, are innovative and tend to be few (Rothaermel, 2013). As such, the strategy used during this stage is likely the differentiation strategy, since firms are seeking to establish the uniqueness of their products’ features (Rothaermel,
