Chapter 3 Flashcards
What’s competitive advantage
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Is the strategic superiority off a firm over its competitors. A firm’s core competencies contribute to its competitive advantage that allows it to outperform competitors. Competitive advantage is not easily duplicated
What’s core competencies
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A firm’s core competencies contribute to its competitive advantage that allows it to outperform competitors.
Is competitive easily duplicated?
No
What’s competitive priority
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Competitive priority is the strategic focus that a firm choose to achieve competitive advantage
Order Qualifiers:
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Basic performance expectations of customers.
Meeting or exceeding performance on an order qualifier is not a
competitive advantage.
• Order Winners:
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A performance characteristic that customers use to
differentiate the products and/or services of a firm from its
competitors.
Search attributes
are the characteristics of a good or service
that a customer can determine prior to purchase.
Supermarket food, furniture, clothing, and automobiles are
high in search attributes.
Examples of search attribute
• Examples of these attributes are color, price, freshness, style, fit
, feel, hardness, and smell.
Experience attributes
are the characteristics that can be determined only after purchase or during consumption.
Examples of Experience attributes
• Examples of these attributes are friendliness, taste, wearability,
safety, fun, and customer satisfaction.
• Credence attributes
are any aspects of a good or service that
the customer must believe in, but cannot personally evaluate
even after purchase and consumption.
Example of Credence Attributes
• Examples are the expertise of a surgeon or mechanic,
knowledge of a tax advisor, accuracy of tax preparation software , laser dental treatment
Examples of High Services Content
Legal Services Tooth Root Canal Auto Repair Medical Diagnosis Estate Planning
Example of High Goods Content
Clothing Jewelry Furniture Houses Automobiles
Which one is difficult to evaluate
A. High Goods Content
B. High Services Content
A. High Service Content
Which one is easy to evaluate
A. High Goods Content
B. High Services Content
B. High Goods Content
Cost Leadership
– high volumes of standardized products by taking advantage of economies of scale and learning curve effects
Differentiation
+ (4)
creating a unique product or service in terms of
- Quality
- Time
- Flexibility
- Innovation
Focus Strategy –
focus on a niche market segment
What are the 2 things that time consist of
speed and consistency
Flexibility
Compete based - Dell example - Customization
What are the 2 types of flexibility
- Design flexibility
2. Volume flexibility
What does design flexibility focus on
customization
What is volume flexibility
capable of selling in high volume
What is an external warranty
- Defect in the product
- For example, Mcdonalds got sued by the customer who had coffee spilt on her and won $2 million
- If you do it the first time you dont have to worry about the external warranty price
What is hub and spoke model
The words “hub” and “spoke” create a pretty vivid image of how this system works. A hub is a central airport that flights are routed through, and spokes are the routes that planes take out of the hub airport. Most major airlines have multiple hubs. They claim that hubs allow them to offer more flights for passengers.
Corporate Strategy
test question
Defines the businesses in which
the firm will participate
Business Strategy
test question
Defines the market segments
and competitive priorities
Operations Strategy
test question
Defines how to execute its business strategy.
It is how a firm’s processes are designed
to produce the type of goods and services
to support the firm’s business strategy
What does the Hierarchy of Strategies include (3)
test question
- Corporate Strategy
- Business Strategy
- Operations strategy
____ is a core competency for a firm
test question
Operations
Is hierarchy of strategies a top down or bottom up strategy?
(test question)
Top down
