Business Level Strategy Of The Strategic Management Process Essay

759 Words Jun 23rd, 2016 4 Pages
As a part of the strategic management process, one must develop a business level strategy. These are the actions that firms must take to achieve competitive advantage. All of these action and such are known as sources of cost advantage or can be under another source known as product differentiation. Sources of cost advantage falls under 6 key categories. These categories are economies of scale, competitor’s diseconomies of scale, learning curve economies, differential low-cost access to productive inputs, technology independent of scale, and policy choices. Although there are 6 categories, a firm does not need to have possible sources of cost advantages under every category. Firstly, economies of scale, means the quantity of a product is increase for a lower price than if there were fewer. Nike sells in more than 170 countries. This means they have to produce quantity beyond the amount companies that only sell in America would. Which also means bigger income for the company. This mitigates risks among individual companies. Another source of cost advantage would be the size of the company. Not only does Nike have stores of their own, Nike’s products are sold in other department stores such as famous footwear which branches their products out to more buyers. Also, these suppliers depend on Nike to sell their product because Nike is such a big company that they will get sold and if Nike makes money then they will return to the same suppliers to make more. Next, there are…

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