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3TECEPStrategicMngmt

Crafting Strategy-The Single Business Company

QuestionAnswer
What is generic strategy? Basic approaches to strategic planning that can be adopted by any firm in any market or industry to improve its competitive performance.
What are the three main generic strategies? differentiation strategy, focus strategy, and low cost strategy
What is strategic choice? The view that, because of the power that organizations dispose of, in practice managers are often not constrained by contextual factors (like technology or environment) but exercise great discretion.
What are the four industry stages? Startup, Growth, Maturity, and Decline
Why is deciding which of the five generic competitive strategies to employ perhaps the most important strategic commitment a company makes? It tends to drive the remaining strategic actions a company undertakes and sets the whole tone for pursuing a competitive advantage over rivals.
What must a company do when employing a low cost provider strategy and trying to achieve a low cost advantage over rivals A company must do a better job than rivals of cost-effectively managing value chain activities and/or it must find innovative ways to eliminate cost producing activities
In what four scenarios do low cost provider strategies work particularly well? (Scenarios 1-2) When the products of rival sellers are virtually identical or very weakly differentiated and supplies are readily available from eager sellers, When there are not many ways to differentiate that have value to buyers,
In what four scenarios do low cost provider strategies work particularly well? (Scenarios 3-4) When many buyers are price sensitive and shop the market for the lowest price, and When buyer switching costs are low.
Broad differentiation strategies seek to produce a competitive edge by doing what? Incorporating tangible and intangible attributes that set a company’s product/service offering apart from rivals in ways that buyers consider valuable and worth paying for.
What three things does successful differentiation allow a firm to accomplish? Command a premium price for its product, Increase unit sales, and/or Gain buyer loyalty to its brand (because some buyers are strongly attracted to the differentiating features and bond with the company and its products).
In what three scenarios do differentiating strategies work best? (Scenarios 1-2) When diverse buyer preferences open up windows of opportunity to strongly differentiate a company’s product offering from those of rival brands, In situations where few other rivals are pursuing a similar differentiation approach,
In what three scenarios do differentiating strategies work best? (Scenario 3) In circumstances where companies are racing to bring out the most appealing next generation product
In what three scenarios is a differentiation strategy likely doomed? (Scenarios 1-2) When competitors are able to quickly copy most or all of the appealing product attributes a company comes up with, When a company’ s differentiation efforts fail to interest many buyers,
In what three scenarios is a differentiation strategy likely doomed? (Scenario 3) When a company overspends on efforts to differentiate its product offering or tries to overcharge for its differentiating extras.
How does a focused strategy delivers competitive advantage? By achieving lower costs than rivals in serving buyers in the target market niche or by developing a specialized ability to offer an appealingly differentiated offering that meets the niche’s needs better than rival brands do.
In what three scenarios does a focused strategy based on low cost or differentiation become increasingly attractive? (scenarios 1-2) When the target market niche is big enough to be profitable and offers good growth potential, When few other rivals are attempting to specialize in the same target segment.
In what three scenarios does a focused strategy based on low cost or differentiation become increasingly attractive? (scenario 3) When it is costly or difficult for multisegment competitors to put capabilities in place to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers,
What do best-cost provider strategies combine? strategic emphasis on low cost with a strategic emphasis on more than minimal quality, service, features, or performance
The aim of best-cost-provider strategies is to what? Create competitive advantage by giving buyers more value for the money for midrange products
What does creating competitive advantage by giving buyers more value for the money entail? Matching close rivals on key quality/service/features/performance attributes, Beating them on the costs of incorporating such attributes into the product or service, and Charging a more economical price.
In what markets do best-cost-provider strategies work best? In markets with large numbers of value-conscious buyers desirous of purchasing appealingly good products and services for less money.
In all cases, competitive advantage depends on what? Having competitively superior resources and capabilities that are a good match for the chosen generic strategy.
A sustainable advantage also depends on what? Maintaining competitive superiority with resources, capabilities, and value chain activities that rivals have trouble matching and for which there are no good substitutes.
What is a low-cost leader’s basis for competitive advantage? Lower overall costs than competitors.
What are successful low-cost leaders exceptionally good at? Finding ways to drive costs out of their businesses and still provide a product or service that buyers find acceptable.
What is a cost driver? A factor that has a strong influence on a company’s costs.
Success in achieving low-cost edge over rivals comes from what? Out-managing rivals in finding ways to perform value chain activities faster, more accurately, and more cost-effectively.
A low-cost provider is in the best position to do what? Win the business of price-sensitive buyers, set the floor on market price, and still earn a profit.
Reducing price does not lead to higher total profits unless what occurs? The incremental gain in total revenues exceeds the incremental increase in total costs.
What is the essence of a broad differentiation strategy? To offer unique product attributes that a wide range of buyers find appealing and worth paying for.
What factor can have a strong differentiating effect? A uniqueness driver
Differentiation can be based on what two things? tangible or intangible attributes.
Easy-to-copy differentiating features are unable to do what? Produce sustainable competitive advantage.
Best-cost provider strategies are a hybrid of low-cost provider and differentiation strategies that aim at what? Providing desired quality/features/performance/service attributes while beating rivals on price.
A company’s competitive strategy is unlikely to succeed unless it is predicated on what? Leveraging a competitively valuable collection of resources and capabilities that match the strategy.
Created by: tybouff
 

 



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