Which strategy focuses on the actions a firm takes in its market to gain competitive advantage?

The focus of a business-level strategy is on the specific actions a firm takes within its market to achieve a competitive advantage over its rivals. This strategy delves into how a company positions itself relative to competitors and determines how it will compete effectively within the industry. It emphasizes:

1. Identifying the target market segment.
2. Understanding customer needs and preferences.

3. Developing a unique value proposition that sets the firm apart from its competitors, whether through cost leadership, differentiation, or focus strategies.

By concentrating on how to compete most effectively in a particular market, business-level strategy enables firms to optimize their strengths, capitalize on market opportunities, and mitigate competitive threats.

In contrast, corporate strategy looks at the overall scope and direction of the entire organization, such as decisions about which markets to enter and how to allocate resources across different business units. Global strategy pertains specifically to how a company positions itself in international markets and deals with global competition. Market penetration strategy is more focused on increasing market share in existing markets rather than establishing competitive advantages through strategic positioning.

Thus, business-level strategy is the most relevant for understanding a firm’s approach to gaining a competitive edge in its specific market.