Business concepts Flashcards
How to tell a story about “event”?
a good story must have: A brief summary of the story. Short context about why the event was taking place. Your role, who reported to you and to whom you reported. the objectives of the role. The challenged you faced, and who provided the challenge. why was the challenge worth overcoming. what you did and the team did to overcome the challenge, the way you told the challenger to persuade him/her. His/her response. the outcome of the story. Use NY times method. Only report things which would make up a story in the paper, no opinions unless you clearly identify them as such.
Characteristics of commodity market
1.Few differentiating points and similar value propositions across market players; 2.Customer segments are price sensitive; 3.Price pressure is high; Margins are likely slim; 4.Volume-driven businesses; Economies of scale are a key success factor; 5.Competitive landscape is likely consolidated with several major players that capture high market share and enjoy high marketing budgets, developed distribution networks and high brand awareness;
Characteristics of differentiated market
- Many differentiating points and unique value propositions between market players; 2. Customer segments are not very price sensitive and ready
to pay price premiums 3.Price pressure is likely low/moderate 4. Margins are likely high/moderate - Differentiating points are one of the key success factors and pricing is not the only purchasing decision making criterium 6.Competitive landscape is likely fragmented with many players offering highly-differentiated product/service lines
Characteristics of New market
- Growth rate is high (likely double-digit numbers) 2.Market is likely attractive due to high growth rate; there are likely many new entrants (particularly if
the barriers of entry are low) 3. Competitive landscape is likely to change dynamically, which focus on non-price competition and high differentiated products 4.The players are likely to invest heavily in R&D, marketing to grow sales rapidly (with the market) and operations (to expand capacity to support rapid growth) 5. Typical profitability is quite low or negative given aggressive investment. 6. main target customers are early adopters who value innovative problem solutions. 7. product innovation decreases and process innovation increases.
Economics of video game industry/console
high-end video game is high-fixed cost industry due to millions of R&D and marketing to develop the complex games and build brand recognition. some vide game companies sell video game consoles at loss in order to lock up as many as players to pay for games and online subscriptions. in the ecosystem, developers are hired to write codes and programs while publishers (Sony and Microsoft, Nintendo) capture the biggest share of profits through sales and distribution. multi revenue streams incl. merchandise (t-shirt. mugs) and movies etc are generated around popular video games. both content and hardware innovation (VR) are key differentiators.
How to improve sales per square foot at grocery retailer
- understand customer base better to have right assortment and pricing 2. revamp your displays at stores 3. retool your marketing and advertising programs 4. find underperforming products or product classes and move those lagging products to another part of the sales floor, as customers could be ignoring them in their current location. If you’ve made all those moves and your efforts haven’t paid off, hold a blowout sale to help cut your losses.
How to improve inventory turnover at grocery retailers?
One option can be: check on re-order procedure to avoid keeping too much inventory at hand but still adequately supply the demand
How to improve average transaction value at grocery retailer?
change product mix; roll out cross-selling display strategy by having accessories or add-on products in store “easy up for grab”
What are typical performance measures at grocery retailers?
- foot traffic (how many customers walk through the door); 2. Units per Transaction (also known as Average Items per Transaction) which can be improved through strategic assortment and pricing; 3. Sales per square foot 4. conversion rate (visitors who actually buy at the store) 5. inventory turnover (=cost of goods sold/cost of avg. inventory) 6. sell through rate (= pieces of products sold/numbers at stock) if it’s too high, then there is risk of empty shelf 7. Gross Margin Return on Investment (profits/cost of avg inventory) 8.Average Transaction Value (revenue/# of transaction) 8.Inventory shrinkage due to shoplifting, admin mistakes, supplier errors/fraud 9.Comparable Store Sales (track change of sales in the same store during multiple period)
What are the key components of marketing?
consumer/market/competition analysis
What is consumer analysis (focus on individuals compared with market analysis) in marketing?
- identify segments of buyers and users; 2. identify users’ needs categories; 3. buyers’ buying process (what steps do they used to buy: problem recognition, info search, evaluate alternatives incl. substitutes, purchase, after-sales behaviors incl. reflection or test or talk with friends) 4. ad. and promotion to build brand awareness and loyalty
What is high-involvement product?
usually expensive and important items for users. it has high risk factor at undesirable purchase. users will take great efforts to do research when evaluating alternatives and it’s not impulsive buys. Availability and distribution is not that as
What factors at segmenting customers for marketing purpose?
- measurability: can we quantify the segment? 2. accessibility: can we reach this segment of customers accurately through marketing? 3. substantiality: how big is this segment? is it shrinking or growing? 4. profitability 5. differentiable: each segment responds to different marketing mix 6. compatibility of competition: how many competitors are chasing this segment? are they overlooking this segment? how will they respond when we enter this segment? 7. defendability: can the company defend this segment when competitors attack 8. actionable: effective program can be designed within capability of the firm
What are the resources of a company? how to manage it?
Resources of a company have to be VRIO: valuable, rare, costly to imitate. It includes: 1. tangible (with physical attributes): Labor, Capital, Land, Buildings, Plant, Equipment, raw material supplies, Good locations 2. intangible ones: corporate culture, employee loyalty, domain expertise, know-how, Brand equity, Reputation for quality or service, IP (Patents, designs, copyrights, trademarks, trade secrets), supplier base, trade relationship, customer goodwill, internal process, innovation capabilities, . Management of resources covers: mgmt resource inflow (investment), outflow (personnel attrition, forgetting of knowledge over the time), resource stocks (knowledge mgmt. and exchange of best practice across SBUs, talent mgmt. and development etc.)
What is capabilities of a company?
A firm’s dynamic capabilities to create, deploy, modify, reconfigure, upgrade, leverage its resources over time in its quest for comp. adv.. and match internal strengths with attractive markets. to build the dynamic capabilities, a firm has to understand the changing market conditions and demand (i.e. regulation, globalization, demographic shift, customers’ preferences’ change), manage its resources inflows (investments of profits) and outflow strategically to build resource stocks that can enhance a firm’s dynamic capabilities along with the context change while managing resource.
What is market analysis?
market size, growth rate, typical profitability, competitive landscape, regulations. we have to assess “relevant market” for market sizing for a company depending on its product portfolio since there are sub-segments of market which are not all relevant.
What is core competencies of a firm?
Unique strengths that a firm can do better and differentiated that competitors. Core competencies are developed through interplay of resources and capabilities and need to be continuously nourished and reinforced to stay competitive. it’s demonstrated in a firm’s activities through value chain by adding incremental values from transforming input to output. SWOT analysis is for analysis.
What are rules for marketing position?
- own a word of benefit in a consumer’s mind 2.position beginning with a good product name 3. use a new name for new product 5. introduce a new brand when introducing different positioned product 6. facing dominant competitors’ products, have a new product category to undercut competitors’ product concept, spokesperson 7. stick with its distinct message and be consistent
What is distribution channel analysis?
how can our products reach customers through different channels? how distant is producer away from its customers per types of paths and how many middleman in between? how is avg. profitability per channel? how does a player in each channel profit? what is markup for each middle man?who holds the power at each distribution channel?
What are the barriers for a firm to enter a new market?
- competitors: mkt share, economies of scale, product offering and value proposition, pricing strategy, established channels, customers’ loyalty, marketing and sales forces, supply chain, proprietary technologies, preferential access to raw materials/distribution channels, favorable geographic locations, cumulative learning and experience effects 2.credible threat of retaliation from incumbent firms especially in shrinking market where deep-pocketed competitors have unused excess capacity, reputational clout with suppliers and customers, with history of retaliation and are tied to heavy investments in resources that are specific to the core industry and ill-suited for adaptive use 3. high switching cost for customers 4. big initial capital investment 5. gov. protectionism policy and regulation 6. burden of foreignness - understanding the cultural norms, biz practice, regulation and policies
What are market-specific risks for market entry?
market growth rate slows down; oversupply by existing players; emerging of new entrants; competitors’ responses; ; strategic moves of substitution; disruptive market trends like commoditization; local stigma about certain product or services, changes of trade policies/regulations, (if at export mode) geopolitical tensions, (if at export mode) change of ex rate, tariffs
