Chapter 4 Flashcards
business level strategies
actions firms take to gain competitive advantage
corporate level strategies
actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously
generic business strategies
business and corporate level strategies
cost leadership business strategy
a firm that chooses this focuses on gaining advantages by reducing its costs to below those of all its competitors
economies of scale
when the increase in firm size(volumes of production) is associates with lower costs(measured in terms of average costs per unit in production)
diseconomies of scale
when you have passed the optimal point of production and costs increase
process manufacturing
chemical, oil refining, paper, etc. facilities
employee specialization
when employees become skilled in one area of production
sources of diseconomies of scale
physical limits to efficient size
managerial diseconomies
worker de-motivation
distance to markets and suppliers
learning curve
where costs decrease because employees are more skilled at what they do
productive inputs
any supplies used by a firm in conducting its business activities, ex: labor, capital, land, and raw materials
technological hardware
the machines and robots
technological software
the quality of relations between labor and management, an organization’s culture, and the quality of managerial controls
policy choices
choices about the kinds of products and services they will sell
functional organization structure
structure used to implement all business level strategies
