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Strategy Chapter 5
| Question | Answer |
|---|---|
| business level strategy | a strategy designed for a firm or a division of a firm that competes within a single business |
| generic strategies | an analysis of business strategy into basic types based on breadth of target market (industry wide vs narrow) and type of competitive advantage (low cost vs uniqueness) |
| overall cost leadership | a firm's generic strategy based on appeal to the industry wide market using a competitive advantage based on low cost |
| experience curve | the decline in unit costs of production as cumulative output increases (similar to economies of scope) |
| competitive parity | a firms achievement of similarity, or being on par with competitors with respect to low cost, differentiation, or other strategic product characteristics |
| differentiation strategy | a firms generic strategy based on creating differences in the firms product or service that is perceived industry wide as unique and valued by customers |
| focus strategy | a firms generic strategy based on appeal to a narrow market segment within an industry |
| combination strategies | firms integrations of various strategies to provide multiple types of value to customers |
| mass custimization | firms ability to manufacture unique products in small quantities at low cost |
| profit pool | total profits in an industry at all points on the value chain |
| digital technologies | info that is in numerical form, which facilitates its storage, transmission, analysis and manipulation |
| disintermediation | the process of bypassing buyer channel intermediaries like wholesalers, distributors, retailers |
| industry life cycle | the stages of introduction, growth, maturity, and decline that typically occur over the life cycle of an industry |
| introduction stage | first step, 1) new products, 2) poorly defined market segments, 3) unspecified product features, 4) low sales growth, 5) rapid technological change, 6) operating losses, 7) need for financial support |
| growth stage | 1) strong increase in sales, 2) growing competition, 3) developing brand recognition, 4) need for financing for value chain activities like market, sales, customer service, R&D |
| maturity state | 1) slowing demand growth, 2) saturated markets, 3) direct competition, 4)price competition, 5) strategic emphasis on efficient operations |
| reverse positioning | offering products with fewer products and lower prices to extend life cycle (create new product so you shift backwards from maturity to growth stage) |
| breakaway positioning | a break in industry tendency to incrementally improve products along specific dimensions by offering products that are still in the industry but perceived by customers as being different |
| decline stage | 1) falling sales, 2) increasing price competition, 3) industry consolidation. 4 strategies: exit, harvesting, consolidating, maintaining |
| harvesting | a strategy of wringing as much profit as possible out of a business in the short to medium term by reducing costs |
| consolidation strategy | M&A within industry to enhance market power and gain valuable assets |
| Turnaround strategy | reverses a firm's decline in performance and returns it to growth and profitability |
| maintaining strategy | keeping product going without reducing marketing or other investments, hope other competitors will exit first |
Created by:
msamaras