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Strategic Management Business Outline

Low-Cost Leadership Strategy

Some of the activities or capabilities that a firm should possess to support a low-cost leadership strategy include:

  • Tight cost control- By having a control in their cost prices, the firm has a grip in the expenses cost hence a favorable competitive edge in the market.
  • Frequent detailed control reports- This enables the firm to have continuous checks on its progress and thus enable it to carry out regular changes whenever there are inconsistencies in the operational plan.
  • Incentives based on meeting strict and quantitative targets- these give morale boost to the staff and encourage them to work towards achieving their set targets.

An example of a company that has adopted this technique of low cost leadership strategy is Wal-Mart (Porter, 1998)

Differentiation Based Strategy

To support a differentiation based strategy, a firm should possess the following capabilities:

  • Tradition of closeness to key customers- key customers is the leeway to a successful firm. This is because they are regular customers who can be relied upon to keep the firm on its feet.  Being close to them therefore ensures improved output aimed at matching their desired tastes hence their continuous presence (Skyme, 1994)
  • Amenities to attract highly skilled labor- these enables the firm to have some of the best skilled personnel with it confines which translates to improved output levels.
  • Subjective measurements and incentives- these are aimed at encouraging staff to increase their output level and in doing so having s positive effect on the firm’s output.

Apple has been able to be in touch with this strategy in the application of its iTunes software download that initially was only accessible to iPods.

Differences between corporate level strategic analysis and business unit strategic analysis

Strategic analysis is the critical scrutiny on the environment surrounding an organization to come up with viable plans for the best operation both at present and in the future.  Corporations have different strategic plans as compared to business units.

Whereas a business unit will look at its strategies in terms of specific divisions in the business, a corporate strategy involves several business units that make up the organization.  Therefore the corporate strategy might consider putting in more input in a particular business unit or foregoing a certain business unit (Donald, 1981).

How a Corporate Business Adds Value

Identify real needs of users-getting to know how your customers use you products are of great importance.  This enables a corporate to get to the specifics as desired by the consumers and hence get a final touch which is appealing to them.

One of the best ways to leverage scarce resources is to let technology do some of the work for you.  Many professionals will use information technology quite extensively. However, there are certain developments that you need to keep abreast of, and offer opportunities for off-loading work: The great benefit of technology is that it allows access to library collections. Networks allow you to promote and deliver your services more easily throughout your organization, and to draw on outside resources. Networking allows access to common material, pooling of resources and greater opportunities for mutual help and support (Aicha, 2007).

Building effective partnerships with clients and suppliers is paramount. There are several means by which partnerships with the business can be strengthened. They operate at three levels:

  • Organization level - the reporting structure can have a positive influence. An information unit that is a corporate function, rather than embedded within one department is generally better positioned. Also treating it as a separate profit centre. The strategic influence is increased when the head of the information unit report to a member of the board.
  • Teams - there should be teams and task forces that bring information professionals together with business managers. If the account manager approach is adopted, ensure that the information professional becomes an integral part of one of the clients’ management teams.
  • Individual - opportunities to improve partnership occur when individuals develop good working relationships with each other. One way of achieving this is through co-location e.g. of an information professional into a user department, between a business unit and the information unit.


Skyme, D. (1994). Managing Information. Journal of business management, 2(13), 168-171.

Porter, M. (1998). Competition in enterprises. New York: Harvard business school press.

Donald, W., et al. (1981). Business management principles. The Academy of Management Journal, 2(4), 663-688.

Aicha, A., et al. (2007). Systems and Operations Management. Research review journal, 5(16), 1336-147.