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