Question

Critically discuss the different business-level strategies that a company can adopt and please indicate which strategy is most beneficial to follow in the smart phone industry.

Answer 1

When we talk about the any organization's competencies which should be focused on satisfying the customers need or should be in order to achieve the exceptional returns, this all can happen only through a Business level strategy where detail actions taken to provide value to customers and gain competitive advantage by the exploiting core competencies in specific or in service markets. Business level strategy is concerned with a firm's position in an industry, relative to competitors and to the five forces of competition . After this discussion we can say that business level strategies are most powerful tool to create and healthy environment to compete with the rival companies .

According to Porter,we have mainly three type of business-level strategy any organization which can really help to gain more advantage over the competitors, these are cost leadership, differentiation and focus.

Cost Leadership strategy- The organizations that pursue cost leadership gain a advantage by reducing there operational cost to a level which is below the industry average. Thus they can add this saving to their products to maintain the average pricing to increase their profits.

You can also try by considering the below things.

Maintaining tight control over product and overhead costs

Minimizing the cost of sales, research and development and customer service

Building state-of-the-art facilities to boost efficiency and productivity

The Differentiation Strategy-The basic theory of this type of strategy is "Simple is good you aim to add value to your products and services so they’re more attractive than those offered by your competitors. Because of the additional product or experiential value you’re delivering, customers are willing to pay a premium price. As such, you can absorb higher operating costs.This strategy can prove quite lucrative. You can apply this by how you create differentiation depends on your product or service as well as your industry, but in general, businesses can offer advanced features, functionality, durability, value-added service and support.It’s important to note that sales and marketing that clearly articulate the unique product or service value to customers is key to differentiation strategy success

The Focus Strategy- If your business leverages the focus strategy, it will target a particular niche market and, by understanding the dynamics of that market and the unique needs of the customers within it, cut costs or differentiate your offerings to capture more market share. You can also apply focus cost stratagy for limited portion of the market because for a cost focus strategy to work, the production and delivery system must differ from that of other industry segments, uncovering a unique cost advantage.

For example, small airlines can provide cheaper rates than their larger, international rivals with access to smaller planes and local airfields for regional flights.

Price to Permanence is the Best Strategy for Smart phone industry:-  In my opinion the best strategy for smart phone industry is Price to Performance because choosing this strategy you can easily combine low cost with differentiation. Because these days this industry has become more competitive and everyone in this world wants to own a smartphone because it gives you the freedom to access various application and facility which was earlier possible with only computers. Price to performance is the best way to hold the mobile phone market as we have seen in the last few years that Apple and Samsung was the leaders of the market for smart phone and people love to buy their phones because of their performance ,looks, durability and service but now the things has been completely change when the Chinese manufacturer have came into the battle , Chinese manufacturer has completely changed the theory of costly phones they have launched the very good phones with low cost and even with the lower prices when compared to Samsung and Apple. Chinese companies like Xiaomi, Honor and Vivo have launched a large no of phone in last few year in very low cost and with same specification when compared to Apple and Samsung and using this strategy they have grabbed good market share within the last few years. If we talk about India only there was only Apple and Samsung was the king of market and they were selling their smartphones on very high prices but Chinese companies started selling their mobile with same specification with 40-50 % lower prices as compare to Samsung and Apple and they became the leader even I would say Xiaomi has became the leader now for Indian smartphone market. Since the Chinese manufacturer as came in to the smartphone market the sales of Apple and Samsung smartphone has decreased to the some extent and they have seen downfall when it comes to the smartphones sold in a year.

We cant say that Chinese giant has grabbed the complete market but has a strong effect on mobile sales but still their are pople who do not rely on these Chinese mobile and still prefer to buy either Apple or Samsung's mobile phones over Chinese mobile due to good customer service only.