Assignment 8 Strategic Management

Directions: Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four (4) double-spaced pages; refer to the “Assignment Format” page located on the Course Home page for specific format requirements.

Making strategic decisions are part of the territory when it comes to the job of an analyst. You’ll need to decide what to do in a given circumstance and then answer questions to explain your decisions. Let’s say you are a Strategic Analyst for a Fortune 500 Company, and your CEO has asked you how to position a specific business and product line to gain a competitive advantage in a single market. This scenario is the foundation of lessons 5, 6, 7, 8, covered in the textbook.

Part A: Product Differentiation

Part Using logical, clear writing, do the following:

Define product differentiation and discuss the role that customer perceptions play in product differentiation.
Identify the three broad categories of product differentiation and two bases of differentiation under each category.
Explain the relationship between product differentiation and managerial creativity.

Part B: Flexibility and Real Options

Part B Using logical, clear writing, answer the following:

What is strategic flexibility? Why is it thought of as a third generic business-level strategy?
What are strategic options?
What are real options?

Part C: Collusion

Part C Using logical, clear writing, answer the following:

What is collusion?
What are the two types of collusion and how are they different?
How does signaling relate to collusion?

Part D: Vertical Integration

Part D Using logical, clear writing, do the following:

Define vertical integration and differentiate between forward vertical integration and backward vertical integration.
Identify the three fundamental explanations of how vertical integration can create value and discuss how value is created under each.
Identify three reasons a firm may be able to create value through vertical integration when most of its competitors are not able to create value through vertical integration.

Solution Preview

Part A: Product Differentiation

Product differentiation is a promotional strategy used by business to differentiate its products from other merchandises in the market segment. This process ensures that the company can distinguish its products or services from others in the market. Primarily, this entails detailing of characteristics that are highly valued by the target consumers (Brenes, Montoya & Ciravegna, 2014). When utilized effectively, product differentiation equips the organization with a competitive advantage as its products are perceived as superior relative to that of its competitors. Notably, customer perception plays a significant role in product differentiation as it defines the differentiation process (Brenes, Montoya & Ciravegna, 2014). By taking into consideration the customer’s perception, the business can present a unique selling proposition relative to their preferences such as low prices.

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