Business Strategy Ch 6

question

goal-directed actions

answer

-to achieve competitive advantage
-in a single product market

question

How should we compete?

answer

Who: which customer segments?
What: customer needs will we satisfy?
Why: do we want to satisfy them?
How: will we satisfy our customers' needs?

question

strategic position

answer

A valuable and unique position which meets customer needs at the highest possible product value for the lowest possible product cost

question

strategic trade offs

answer

choices between a cost or value position with purpose to maximize the firm's economic value creation and profit margin

question

differentiation strategy

answer

seeks to create higher value vs competitors, offers unique features, charges higher prices

question

cost leadership strategy

answer

seeks to create similar value vs competitors, charges lower prices

question

differentiation strategy competitive advantage achieved when

answer

value-cost is greater than competitors

question

economies of scale

answer

decreases in cost per unit, achieved as output increases

question

economies of scope

answer

saving that comes from producing two outputs at less cost, shares the same resources of technology

question

Three Drivers That Increase Perceived Value

answer

product features, customer service, complements

question

product features

answer

increase the perceived value of the product or service offering

question

complements

answer

add value to a product or service when they are consumed in tandem

question

cost leadership strategy goals

answer

Reduce cost below competitors
Offer adequate value
Reduce prices for customers
Optimize the value chain for low cost

question

cost leader achieves competitive advantage as long as

answer

value-cost is greater than competitors

question

drivers that keep costs low

answer

cost of input factors, economies of scale, learning-curve effects, experience-curve effects

question

cost of input factors

answer

raw materials, capital, labor, IT services

question

learning-curve effects

answer

less time to produce output with experience

question

experience-curve effects

answer

improvements to technology and production processes

question

diseconomies of scale

answer

-firms too big
-complexities of too much coordination
-inflexible and slow

question

a successful strategy

answer

•Leverages the firm internal strengths.
•Mitigates internal firm weaknesses.
•Exploits external opportunities.
•Avoids external threats.

question

blue ocean strategy

answer

strategy that combines both differentiations and cost leadership activites, a firm that offers a differentiated product or service at a low cost

question

blue oceans represent

answer

-untapped market space
-creation of additional demand
-opportunities for highly profitable growth

question

red oceans

answer

market space of existing industries

question

to achieve successful value innovation

answer

lower costs, increase perceived consumer benefits

question

strategy canvas

answer

graphical depiction of a company's relative performance relative to its competitors, shows focus or divergence

1 of 25

question

goal-directed actions

answer

-to achieve competitive advantage
-in a single product market

question

How should we compete?

answer

Who: which customer segments?
What: customer needs will we satisfy?
Why: do we want to satisfy them?
How: will we satisfy our customers' needs?

question

strategic position

answer

A valuable and unique position which meets customer needs at the highest possible product value for the lowest possible product cost

question

strategic trade offs

answer

choices between a cost or value position with purpose to maximize the firm's economic value creation and profit margin

question

differentiation strategy

answer

seeks to create higher value vs competitors, offers unique features, charges higher prices

question

cost leadership strategy

answer

seeks to create similar value vs competitors, charges lower prices

question

differentiation strategy competitive advantage achieved when

answer

value-cost is greater than competitors

question

economies of scale

answer

decreases in cost per unit, achieved as output increases

question

economies of scope

answer

saving that comes from producing two outputs at less cost, shares the same resources of technology

question

Three Drivers That Increase Perceived Value

answer

product features, customer service, complements

question

product features

answer

increase the perceived value of the product or service offering

question

complements

answer

add value to a product or service when they are consumed in tandem

question

cost leadership strategy goals

answer

Reduce cost below competitors
Offer adequate value
Reduce prices for customers
Optimize the value chain for low cost

question

cost leader achieves competitive advantage as long as

answer

value-cost is greater than competitors

question

drivers that keep costs low

answer

cost of input factors, economies of scale, learning-curve effects, experience-curve effects

question

cost of input factors

answer

raw materials, capital, labor, IT services

question

learning-curve effects

answer

less time to produce output with experience

question

experience-curve effects

answer

improvements to technology and production processes

question

diseconomies of scale

answer

-firms too big
-complexities of too much coordination
-inflexible and slow

question

a successful strategy

answer

•Leverages the firm internal strengths.
•Mitigates internal firm weaknesses.
•Exploits external opportunities.
•Avoids external threats.

question

blue ocean strategy

answer

strategy that combines both differentiations and cost leadership activites, a firm that offers a differentiated product or service at a low cost

question

blue oceans represent

answer

-untapped market space
-creation of additional demand
-opportunities for highly profitable growth

question

red oceans

answer

market space of existing industries

question

to achieve successful value innovation

answer

lower costs, increase perceived consumer benefits

question

strategy canvas

answer

graphical depiction of a company's relative performance relative to its competitors, shows focus or divergence

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Business Strategy Ch 6

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