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An integration strategy refers to offering customers more value for the money by satisfying their desires and reducing costs compared to competitors with similar caliber product offerings.
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Functional-level strategy is the determination of the long-term goals and objectives, the allocation of the resources, and the adoption of the courses of action in seeking competitive advantage at the functional or department level.
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If a company adopts a differentiation strategy, marketing strategy plays the most important role. There are three major tools of marketing for achieving higher value: product innovation, focusing on customer service, and finding complements.
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There are two types of product innovation: incremental innovation and radical innovation
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Incremental innovation refers to exploiting the existing knowledge base and small improvements of existing products.
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Radical innovation refers to exploring novel knowledge and development of new and different products.
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Customer relationship management (CRM) is a technique that uses IT to develop a continuous relationship with customers to maximize the value a company can deliver to them over time.
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Complements refer to the products that add value to the products of companies in an industry because when used together the combined products better satisfies customer demands.
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Two important tools of marketing for a cost leadership strategy are aggressive pricing, promotion and advertising, and building brand loyalty.
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Three major tools of production for a cost leadership strategy are economies of scale, experience effects, and process innovation.
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Economies of scale includes decreases in average costs per unit of production as output increases.
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Experience effects refer to the systematic lowering of costs, which are observed to occur over the life of a product.
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Process innovation includes a new method or technology to produce an existing product.
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The major tools for an integration strategy are economies of scope, flexible manufacturing, and mass customization.
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Economies of scope result when the value chains of two separate products (e.g. motorcycles and automobiles) share activities, such as the same marketing channels or manufacturing facilities. The cost of combined production of multiple products can be lower than the cost of separate production.
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Flexible manufacturing includes to using machines to do multiple tasks so they can produce a variety of products.
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Mass customization is tailoring products to meet the needs of a large number of individual customers.
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The company hires a large number of lowskilled employees who receive low pay and perform repetitive jobs.
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The company hires high-skilled and creative employees who receive higher than the average pay, are developed and motivated regularly, perform customized jobs, and likely work for a long period.
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If a company adopts an integration-focused HR strategy, the use of self-managing teams, whose members coordinate their own activities and make their own hiring, training, work, and reward decisions, is an appropriate tool.
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Self-managing teams are composed of members who coordinate their own activities and who make their own hiring, training, work, and reward decisions.
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Global strategy includes the determination of the long-term goals and objectives, the allocation of the resources, and the adoption of courses of action in seeking competitive advantage when competing around the world.
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Companies primarily confront two sets of pressures in the global context: cost reduction and local responsiveness.
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Global integration - local responsiveness is a model on how to simultaneously deal with two sets of pressures for global integration and local responsiveness.
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Based on the integration-responsiveness framework, the four strategic choices for companies to be adopted are as in the following: • home replication • localization • global standardization • transnational strategy
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