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Strategy and business-level strategy

  1. Define strategy and business-level strategy. What is the difference between these two concepts?
    [10 points]
    Case Scenario 2: Barracuda Inc.
    Barracuda Inc. is a lamp fixture manufacturer that is considering an entry strategy into the U.S. home
    furnishings manufacturing industry. The existing landscape consists of many players but none with a
    controlling share. There are presently 2500 home furnishings firms, and only 600 of those have over 15
    employees. Average net profit after tax is between 4 and 5%. While the industry is still primarily
    comprised of single-business family-run firms that manufacture furniture domestically, imports are
    increasing at a rapid rate. Some of the European imports are leaders in contemporary design. Relatively
    large established firms are also diversifying into the home furnishings industry via acquisition. Supplier
    firms to the home furnishings industry are in relatively concentrated industries (like lumber, steel, and
    textiles). Retailers, the intermediate customer of the home furnishings industry, have been traditionally
    very fragmented. Customers have many products to choose from, at many different price points, and few
    home furnishing products have strong brands. Also, customers can switch easily among high and low-
    priced furniture and other discretionary expenditures (spanning big screen TVs to the choice of
    postponing any furniture purchase entirely).
  2. (Refer to Case Scenario 2) Using the five-forces framework, summarize the opportunities and
    threats facing Barracuda as it considers entry into the home furnishings manufacturing
    industry. Which threats are greatest to current incumbents? [10 points]
  3. Describe a value chain analysis. How does a value chain analysis help a firm gain competitive
    advantage? [10 points]
  4. The text points out that from a resource-based view, you and your firm need to develop overwhelming
    capabilities to offset the liability of foreignness. However, how does a small firm do that? [10 points]
  5. The text points out that not all firms should go global. In view of vast opportunities, why should some
    firms not pursue international business? [10 points]

Sample Solution

h it had attracted advocates for a long time, now came into full vogue and continued to dominate economic thinking. Discovery introduced Europe to new foods and beverages. Coffee, from Ethiopia, had been consumed in Arabia and Egypt before its wide European use began in the 17th century. Tobacco, an American plant smoked by Indians, won an Old World market despite many individual objectors; the same proved true of chocolate from Mexico and tea from Asia. The South American potato became a staple food in such places as Ireland and central Europe. Cotton, from the Old World, took firm root in the New, from which Europe received an enormously increased supply. Sugar, introduced to the American tropics, along with its molasses and rum derivatives, in time became the principal exports of those regions. Spice was certainly more plentiful than before the discoveries, though the Dutch, when they controlled the East Indies, were able to limit production and thus to keep the price of cloves and nutmegs high. The influence of the discoveries permeated literature. Sir Thomas More’s Utopia, printed in 1516 and dealing with an imaginary island, was suggested by South America. The Portuguese poet Luís de Camões recounted the voyage of Vasco da Gama, though fancifully, in epic verse. Michel de Montaigne discoursed upon American savages, some of whom he had seen in France. Christopher Marlowe’s drama Tamburlaine (1587), though based on the life of the Asiatic conqueror, was an exhortation to his fellow Englishmen to penetrate the New World. Historiography acquired a broader base by taking the newly discovered lands into account. Astronomy was revolutionized by European penetration of the Southern Hemisphere and discovery of constellations unknown before. Map makers, typified by the Fleming Gerardus Mercator and the Dutchman Abraham Ortelius, portrayed the world in terms that are still recognizable. Colonies from northern Europe and mercantilism (17th century) The northern Atlantic powers, for understandable reasons, acquired no permanent overseas possessions before 1600. The United Provinces of the Netherlands spent the final decades of the 16th century winning independence from Spain; France had constant European involvements and wars of religion; England, matrimonially allied wit
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