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Strategic Managment > Ch 4 > Flashcards

Ch 4 Flashcards

1
Q

What is Strategic competitiveness results ?

A

Strategic competitiveness results only when the firm satisfies a group of customers by using its competitive advantages as the basis for competing in individual product markets.

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2
Q

The most successful companies try to find new ways to:

A

• Satisfy current customers
• Meet the needs of new customers

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3
Q

Firms strengthen their relationships with customers by delivering……. ….. .. ……….

A

superior value to them.

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4
Q

• Delivering superior value often results in……… ………. …………..

A

increased customer satisfaction.

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5
Q

• Richness concerns the depth and detail of the two-way flow of information between the ……. and ………………..

A

firm and customers

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6
Q

A firm decides who the target customer is by what?

A

by dividing the customers into groups based on differences in customers’ needs.

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7
Q

Wha is Market segmentation ?

A

Market segmentation is the process of dividing customers into groups based on their needs.

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8
Q

………… ………….is used to cluster customers with similar needs into individual and identifiable groups.

A

Market segmentation

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9
Q

Firms can use almost any identifiable human or organizational characteristic to subdivide a market into segments that differ from one another on a given characteristic.
T or F

A

True

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10
Q

What is the Basis for Customer Segmentation?

A

Consumer Markets
1. Demographic factors (age, income, sex, etc.)
2. Socioeconomic factors (social class, stage in the family life cycle)
3. Geographic factors (cultural, regional, and national differences)
4. Psychological factors (lifestyle, personality traits)
5. Consumption patterns (heavy, moderate, and light users)
6. Perceptual factors (benefit segmentation, perceptual mapping)

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11
Q

What is the Basis for Customer Segmentation in Industrial Markets ?

A

Industrial Markets
1. End-use segments (identified by Standard Industrial Classification [S I C] code)
2. Product segments (based on technological differences or production economics)
3. Geographic segments (defined by boundaries between countries or by
regional differences within them)
4. Common buying factor segments (cut across product market and geographic
segments)
5. Customer size segments

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12
Q

How to Determining Which Customer Needs to Satisfy

A

Having close interactions with current and potential customers helps a firm identify the targeted customer group’s current and future needs that its products can satisfy.

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13
Q

A firm must determine how to use its …… …………..in order to implement value- creating strategies and develop products that can satisfy its target customers’ needs.

A

Core competencies

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14
Q

…. …………are resources and capabilities that serve as a source of competitive advantage for the firm over its rivals.

A

Core competencies

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15
Q

Customers’ expectations can be met and exceeded across time by only those firms with the capacity to:

A

• Improve consistently
• Innovate
• Upgrade their competencies

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16
Q

The purpose of a business-level strategy is to create differences between the firm’s……………. and those of its………………..

A

position / competitors

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17
Q

To position itself differently from competitors, a firm must decide if it intends to perform activities differently or if it will perform different activities.
T or F

A

T

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18
Q

the firm’s business-level strategy is not a deliberate choice about how it will perform the value chain’s primary and support activities to create unique value.
T or f

A

F

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19
Q

Business models are part of a comprehensive business- level strategy.
T or f

A

T

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20
Q

What is A business model?

A

A business model describes what a firm does to create, deliver,and capture value for its stakeholders.
• A business model influences the implementation of strategy, especially in terms of the interdependent processes the firm uses during implementation.

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21
Q

Developing and integrating a business model and a business- level strategy will not increases the likelihood of company success.
T or F

A

F

22
Q

There are many types of business models, including?

A
  • The franchise model
  • The freemium model
  • The advertising model
  • The subscription model
  • The peer-to-peer model
23
Q

What is The franchise mode?
With examples

A

A firm licenses its trademark and the processes it follows to create and deliver a product to franchisees.
• Example: McDonald’s

24
Q

What is The peer-to-peer model?
With example

A

A business matches those wanting a particular service with those providing that service.
• Example: Airbnb

25
Q

What is The subscription model

A

A firm offers a product to customers on a regular basis such as once-per-month, once-per-year, or upon demand.
• Example: Netflix

26
Q

What is the five business-level strategies to establish and defend theirmdesired strategic position against competitors:

A
  1. Cost leadership
  2. Differentiation
  3. Focused cost leadership
  4. Focused differentiation
  5. Integrated cost leadership /differentiation
27
Q

None of the five business-level strategies is inherently or universally superior to the others.
T or F

A

T

28
Q

The effectiveness of each strategy is contingent on the:

A

• Opportunities and threats in a firm’s external environment
• Strengths and weaknesses derived from its resource portfolio

29
Q

What is The cost leadership strategy?

A

The cost leadership strategy is an integrated set of actions taken to produce products with features that are acceptable to customers at the lowest cost, relative to that of competitors.

30
Q

Firms using the …… ………….strategy commonly sell standardized goods or services, but with competitive levels of differentiation, to the industry’s most typical customers.

A

cost leadership strategy

31
Q

Firms that effectively use the cost leadership strategy can earn above -average returns despite the presence of strong competitive forces.
T or F

A

T

32
Q

Factors that influence the degree of rivalry that firms encounter when implementing the cost leadership strategy include:

A

• Organizational size
• Resources possessed by rivals
• A firm’s dependence on a particular market
• Location
• Prior competitive interactions between firms
• A firm’s reach, richness, and affiliation with customers

33
Q

What is Bargaining Power of Buyers (Customers) ?

A

Although customers can force a cost leader to reduce its prices, prices will not be reduced below the level at which the cost leader’s next-most-efficient industry competitor can earn average returns.

34
Q

Competitive Risks of the Cost Leadership Strategy
Competitive risks associated with the cost leadership strategy include:

A

• A loss of competitive advantage to newer technologies
• A failure to detect changes in customers’ needs
• The ability to imitate the cost leader’s competitive advantage through competitors’ own distinct strategic actions

35
Q

What is The differentiation strategy?

A

The differentiation strategy is an integrated set of actions taken to produce products (at an acceptable cost) that customers perceive as being different in ways that are important to them.

36
Q

Through the……….. …………., the firm produces distinctive products for customers who value differentiated features more than low cost.

A

differentiation strategy

37
Q

To maintain success by implementing the differentiation strategy, the firm must:

A

• Consistently upgrade differentiated features that customers value
• Create new valuable features without significant cost increases

38
Q

Firms using the………….. strategy seek to differentiate their products from competitors’ products on as many dimensions as possible.

A

differentiation

39
Q

Firms use the……….. ……… to determine if they are able to link the activities required to create value by using the differentiation strategy.

A

value chain

40
Q

There are ways that firms using the……….. …………. can successfully position themselves in terms of the five forces of competition to earn above-average returns.

A

differentiation strategy

41
Q

Higher costs from suppliers can be:

A

• Absorbed by high margins earned by the firm Passed to customers through price increases

42
Q

Substantial barriers to potential entrants are created by:

A

• Customer loyalty
• The need to overcome the uniqueness of a differentiated product

43
Q

Risks associated with the differentiation strategy include:

A

• A customer group’s decision that a differentiated product’s unique features are no longer worth a premium price
• The inability of a differentiated product to create the type of value for which customers are willing to pay a premium price
• The ability of competitors to provide customers with products
that have features similar to those of the differentiated product, but at a lower cost
• Counterfeiting
• The failure of a firm to meet customers’ expectations through its efforts to implement the differentiation strategy

44
Q

What is The focus strategy

A

The focus strategy is an integrated set of actions taken to produce products that serve the needs of a particular segment of customers.

45
Q

What is The integrated cost leadership /differentiation strategy

A

finds a firm engaging simultaneously in primary value chain activities and support functions to achieve a low cost position with some product differentiation.

46
Q

Information networks link companies with their:

A

• Suppliers
• Distributors
• Customers

47
Q

When used effectively, information networks help the firm satisfy customer expectations in terms of:

A

• Product quality
• Delivery speed

48
Q

What is Total quality management (T Q M)

A

Total quality management (T Q M) involves the implementation of appropriate tools / techniques to provide products and services to customers with best quality.

49
Q

Firms develop and use TQM systems to:

A

• Increase customer satisfaction
• Cut costs
• Reduce the amount of time required to introduce innovative products to the marketplace

50
Q

What is the Competitive Risks of the Integrated Cost Leadership / Differentiation Strategy

A

The primary risk of this strategy is that a firm might produce products that do not offer sufficient value in terms of either low cost or differentiation.

Strategic Managment (5 decks)

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