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Given that we cannot always control political, technological, economic, or cultural issues, how often would you reevaluate your business strategy to maintain a competitive edge in the market place? What factors would you use to evaluate the need for change, and what tools you would use to make the changes? Making decisions about price, promotion, and distribution is a process that is greatly influenced by profitability, competition, growth opportunities, and other factors that define the dynamics of the industry as well as the marketplace. These factors should be fully analyzed while creating the strategy and then monitored for changes on a regular basis. When a proven strategy begins to produce declining profitability, when new competition threatens to whisk away business, when growth opportunities reduce, or when there are mergers, acquisitions, and divestitures, companies would need to reevaluate their business strategy. Tools that can be used to evaluate the need for a change in business strategy include strategy-option ranking and decision trees to determine suitability; forecasting, cash flow, resource-deployment, and breakeven analysis to determine feasibility; as well as stakeholder mapping and sensitivity analysis to determine acceptability. 2. While performing an external environmental analysis how important is it to use all four components and why? Explain your reasoning. Scanning, monitoring, forecasting, and assessing are the four components of external environmental analysis. Scanning is important because it helps identify early signs of changes and trends in the environment. Monitoring is important because it helps detect meaning through continued observations on changes and trends in the environment. Forecasting is important because it helps develop projections of expected outcomes depending on the changes and trends that are being monitored. Assessing is important because it helps determine both timing and importance of changes and trends in the environment as they apply to the strategy-management of a company. All these components are equally important because they not only help managers fully use opportunities that have the potential to result in higher profits, but also minimize the impact that threats could have on the future of the organization. Reference: http://www.icaew.com/index.cfm/route/157635/icaew_ga/my_ICAEW/Learning_partners/Hi gher_education_institutions/Application_level_inspection_copy_Business_Strategy/pdf

3. In this week's lesson you learned that the industry environment has a more direct effect on a firm's strategic competitiveness and above-average returns than the general environment. Explain why this is so and discuss ways in which companies can stay abreast of changes that occur in their industry. Being the primary area of interest, operation, and outcome, the industry environment, when compared to the general environment, produces a greater degree of direct effect on both strategic competitiveness and above-average returns of a company. Industry, in simple terms, constitutes a set of companies that produce products that can serve as close substitutes to one another. Usually, industries have varied combinations of strategy combinations that companies can deploy while aiming for above average returns. The choice of these strategies partly depends on the influence exerted by the characteristics of the industry. Companies can remain abreast on industry changes by addressing the threats that new competition brings into play, managing supplier and buyer power, embracing technology and innovation, keeping an eye on product substitutes, and working strategically amidst the intense rivalry between competitors. 4. Describe the fundamental objectives of using any of the business-level strategies to create an effective plan and the way these objectives impact the action steps a company will take to gain a competitive advantage. Business-level strategies, simply defined, are integrated and coordinated commitments and measures that companies use to attain competitive advantage through the exploitation of core competencies, as it applies to particular product markets. Business level strategies help a company define the target market that it will serve, determine the needs of that target market, and decide how it will cater to those needs. Finding the target market and its needs involves taking actions towards building a customer profile by conducting research on consumer demographics and psychographics. Catering to consumer needs involves taking actions towards getting the resources and capabilities of the company together to create core competencies and channeling them to fulfill consumer needs. Generic strategies for building a competitive advantage include cost leadership, differentiation, focused low cost, and focused differentiation. Reference: http://www.albany.edu/faculty/ja0754/bmgt481/lecture4.html

5. Explain the analysis a company must make prior to developing a successful business-level strategy. Prior to the creation of a successful business-level strategy, a company must conduct a situation analysis to generate concrete solutions to a well-defined collection of strategic queries so that the strategic scenarios and business position of the company are appraised to serve as inputs in crafting a suitable strategy. The focus should be on both micro and macro environments of the company. The efficiency of the companys existing strategy, SWOT, competitiveness of the costs and prices of the company, strength of the companys competiveness, and strategic issues faced by the company are important areas that should be addressed by the situation analysis. 6. Identify one type of business-level strategy and explain how you would use it to increase Above-Average returns in the dairy industry. Use these links, http://www.dairyfoods.com/, http://www.usda.gov/ Considering that dairy foods appeal to a wide range of customers, I would make use of the broad differentiation strategy. It would allow me to present the Dairy Foods brand and its wide range of products and services in a way that sets the company positively apart from the competition. Using a broad differentiation strategy, Dairy Foods will be able to develop brand loyalty in customers and make it serve as an entry-barrier. Other advantages include ability to handle substitute-product threats and reduced bargaining power of customers. Dairy Foods could explore differentiation opportunities in its supply chain, R&D, production processes, marketing initiatives, sales methods, and service activities. References: http://www.dairyfoods.com/ http://www.usda.gov/wps/portal/usda/usdahome