3.1.2 Corporate strategy Flashcards
1
Q
What is a corporate strategy?
1
A
- Medium to LT plan for achieving corporate objectives
2
Q
What should a successful strategy consider?
2
A
- Firm’s strength
- Firm’s external environment
3
Q
What position does Porter believe to be the best in the long term?
1
A
- Lowest cost operator, differentiated
4
Q
What are the pros of being a lowest cost operator?
6
A
- Undercut rivals on price
- EOS
- ^Productivity/efficiency
- ^Capacity utilisation
- Access to widest distribution channels
- ^Bargaining power (>price)
5
Q
To be successful in the long term, what must the low cost strategy be?
1
A
- Advantage that rivals can’t easily copy (distinctive capabilities)
6
Q
What are distinctive capabilities?
1
A
- Adv that rivals can’t easily copy
7
Q
When differentiating a product, what must it be?
2
A
- Cost effective (+feature that cost more than customer is willing to pay)
- Sustainable (comp can’t quickly copy)
8
Q
Why does being a lowest cost operator allow economies of scale?
1
A
- Typically involved operating on large scale
9
Q
What is the focused low cost strategy?
1
A
- Focus on niche market and lowest cost operator
10
Q
What is the cost reduction likely to stem from in terms of focused low cost strategy?
2
A
- Operational efficiencies
- ^Productivity
11
Q
What is the focused differentiation strategy?
1
A
- Differentiation in niche market
12
Q
What are the pros of the focused differentiation strategy?
2
A
- Sustainable success
- ^Margin, >volume business model
