2. Business Strategy and Competitive Advantage Flashcards
What makes up the operating environment? (also called competitive market and task environment)
Competitive position (improves chances of designing something to optimise outcome and better forecasting) Creditors (Reputation and fair value) Labor Market (Reputation, employment rates, availability, labour unions) Suppliers (Must have a god reputation with them and hopefully give discounts) Customer Profiles (customer behaviour, target segments of customers, geographic, demographic, psychological, buyer behaviour)
What makes up the industry environment?
Supplier power Substitute availability Competitive rivalry Powerful buyers Threat of Entry
What makes up the remote environment?
Economic (Interest rates, inflation, disposable income etc) Social (beliefs, values, attitudes, opinions, lifestyles etc) Political (direction and stability, legal factors, fair-trade, minimum wage etc) Technological (innovation, can be obsolete) Ecological (pollution, soil, water etc)
What three factors make up the Firms external environment?
Operating environment Industry environment Remote environment
What is Eco-efficiency?
Company actions that produce more useful goods and services while continuously reducing resource consumption and pollution
What is economies of scale?
The savings that companies achieve because of increased volume
What is product differentiation?
The extent to which customers perceive differences among products and services
What is structural attributes?
The enduring characteristics that give an industry its distinctive character
What is concentration in regards to industry structure?
The extent to which industry sales are dominated by a few firms
What are the five driving forces of competitive strategy?
Suppliers Buyers Substitutes Potential entrants Industry competitors
What are the six major sources of barriers of entry?
Economies of scale Product differentiation Capital requirements Switching costs Access to distribution channels Government policy
What is a Strategy?
It specifies how an organisation matches its own capabilities with the opportunities in the market place to accomplish its objectives
What are the four elements of value proposition?
Cost (The price paid by the customer) Quality (The difference between what the customer is promised and what the customer receives) Functionality and features (The performance of the product and the level of satisfaction of the customer for what they paid) Service (All the other elements of the product relevant to the customer)
What is value proposition?
Identifying its target customers and delivering what those customer want
What are the two generic strategies?
Product differentiation (Customers perceive theses as superior and unique) Cost leadership (Lowest prices (bunnings))
What are the five factors of the Porter five forces analysis?
