Chapter 3 Flashcards
“Right Work” elements
Vision, mission, goals, strategies, plans
Four Strategy Options
Differentiation, low-cost, combo, focus
Differentiation
Provide product/service features/benefits that are superior and more attractive to customers than competitive offerings
Low-cost
Have the lowest total cost methods for producing products/services vs. competitors
Combo
Selects a few differentiation features for its product/services but is able to provide them with a lower cost structure than rivals
Focus
Targets a market segment that the business can serve more effectively than rivals (geographic, demographic, or specialized product/service segment of the market)
External Analysis tools
Porter’s Five Forces, industry life cycle analysis, macroenvironmental analysis
Porter’s Five Forces
Threat of new entrants, intensity of rivalry, bargaining power of buyers, bargaining power of suppliers, threat of substitutes
Industry life cycle analysis
External Analysis Tool that looks at typical stages of Evolution of Industries
Embryonic Life Cycle
new product/service begins the formation of a new industry
Growth Life Cycle
When new product/service begins to be broadly accepted by customer
Shakeout life cycle
Growth begins to flatten and even start to decline with several industry participants opting to exit or merge.
Mature life cycle
Growth begins to slow and new entrants become fewer
Declining life cycle
Growth is negative and only few remain in the industry
Macroenvironmental analysis
Tool evaluates factors that broadly affects all industries
Assesses them as opportunity, threat, both or neither
