Business-Level and Corporate-Level Strategies

Week 8 Business-Level and Corporate-Level Strategies
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BUS499 Business Administration Capstone
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Week 8 Business-Level and Corporate-Level Strategies
Companies use business-level strategies and act as a guide on how they attain a sustainable competitive advantage over their rivals. These strategies have been instrumental in determining the nature of competition in any given market and have helped increase innovation and product development. As such, a business-level strategy is determined by its position in the market or industry compared with competitors. These strategies outline the actions taken by a firm to provide value to its customers and acquire a competitive advantage in a given market. Corporate level strategies, on the other hand, encompass plans that define a firm’s main purpose and objectives. The purpose of this discussion is to explicate business-level and corporate-level strategies and how firms can apply them to maintain a lead over their competitors. In achieving this, Nike Inc. is used as a focal point. An assessment is made on how the company has been able to exploit business-level strategies and corporate-level strategies to remain ahead of the competition over the years.
Business-Level Strategies
There are various generic business strategies that a firm can choose from to develop a competitive advantage. According to Baumann-Pauly, Scherer & Palazzo (2016), a cost-leadership strategy entails pricing products at the minimum price possible to sustain leadership in the market/industry. This strategy is used when the firm is looking to appeal to customers who are sensitive to price. In realizing low costs, a firm may cut down on the cost of operation, optimize the use of assets, or use economies of scale. The differentiation strategy is developing products with unique features or whose selling points are unique compared to those provided by market competitors. Finally, focus strategies entail targeting a certain population within a small market to sell a firm's product. Such a market is characterized by specialized needs that firms exploit in developing their products.
As enshrined in its mission and vision statement, the firm's objectives are to provide customers inspiring and innovative products while ensuring its brand remains distinctive and connected. Since its formation, the company has enjoyed continued growth and has remained ahead of its competitors over the years (Fung, Choi & Liu, 2020). The company, which operates in sportswear and apparel, has used two business strategies to achieve its vision and mission; differentiation strategy and cost leadership strategy.
Arguably, the business model used by Nike is generally molded around differentiation. As its main business strategy, the company has focused on using technology and innovation to provide unique products for its customers. This has been critical in helping it stay ahead of the competition. To start with, the company has invested hugely in research and development to provide customers with unique quality customers. Through innovation, the company has developed products such as i-pod distance tracking products and auto/lacing shoes that other competitors can only copy from (Burgelman, 2017). Another characteristic that is evident in the company's differentiation strategy is diversification. The company offers a wide range of products to meet the needs of a wide collection of clients. According to Sharma and Jain (2019), the company boasts of a wide range of products spanning almost every sporting field, including soccer, golf, auto racing, cycling, surfing, and track and field. In addition, the company has also made investments in off-the-cuff clothing and accessories that customers can identify within, including but not limited to backpacks, hairbands, purses, shirts, and watches. As a result, the company has been able to diversify its business, and this can be seen in its ownership of other brands such as Jordan and Converse brands.
Even though Nike does not place much emphasis on cost leadership strategy as it does on differentiation strategy, the former has also been critical in driving business. Notably, Nike’s products are highly-priced but this is substituted by the unique quality that characterizes its products. In this regard, customers are willing to part with their money given the assurance that the products they are getting are of high quality. Furthermore, the ability of the company to take advantage of economies of scale has helped it apply cost leadership strategy in conjunction with differentiation strategy to gain a competitive advantage (Burgelman, 2017). Given its size and the high demand for its products, the company can comfortably purchase supplies in bulk, essential in getting huge discounts. The company's size also implies that it can easily influence the prices of raw materials. The firm can also negotiate with suppliers thanks to its size, which in turn helps reduce the cost of production. In addition to taking advantage of cost leadership, the company has also been applying outsourcing of processes to reduce the costs of operations. Outsourcing has been critical in ensuring that the company remains lean, flexible concerning price changes, and spends less on labor (Fung, Choi & Liu, 2020). Notably, Nike’s most processes are outsourced from the Asian region, where the labor cost is relatively cheap compared with prices in the home country.
Corporate-Level Strategy
Nike derives the largest share of its income from the sale of shoes and apparel products. Over the years, the company has been improving its distribution channels and employing the newest technology to remain sustainable in the market. The company has been keen on product development as one of its corporate-level strategies. In the light of this, the company has been introducing new products regularly thanks to its high investment in research and development and use of technology. As a result, the company's products remain attractive to customers who would instead stick with Nike's products though willing to change their preferences. In addition, Nike has invested heavily in market development. Investments in advertisement and sponsorship activities have increased the company’s market penetration which has been vital in maintaining it at position number one in the market (Baek, Byon, Choi & Park, 2017) Arguably, by opening stores and exploring new markets, including Brazil, Africa, and India among others. Besides selling existing products in these markets, the company has also taken advantage of diversification, introducing new products to meet the needs of the new markets. Another strategy employed by the company at the corporate level is supplier diversity. With the increased demand for prod...