Chapter 5 Flashcards
an analysis of business strategy into basic types of based on breadth of target market (industrywide versus narrow market segment) and type of competitive advantage (low cost versus uniqueness).
Generic Strategies
A firms generic strategy based on appeal to the industrywide market using a competitive advantage based on low cost.
Overall cost leadership
The decline in the unit cost of production as cumulative output increases
Experience curve
A firms achievement of similarity or being “on par” with competitors with respect to low-cost, differentiation, and other strategic product characteristics
Competitive parity
A firms generic strategy based on creating differences in the firms product or service offering by creating something that is perceived industrywide as unique in valued by customers
Differentiation strategy
A firms generic strategy based on appeal to a narrow market segment within an industry
Focus strategy
Firms’ integrations of various strategies to provide multiple types of value to customers
Combination strategies
A firm’s ability to manufacture unique products in small quantities at low-cost
Mass customization
The total profits in an industry at all points along the industry’s value chain.
Profit pool
Information that is in numerical form, which facilitates it’s storage, transmission, analysis and manipulation
Digital technologies
The process of bypassing buyer channel intermediaries such as wholesalers, distributors, and retailers.
Disintermediation
The stages of introduction, growth, maturity, and decline it typically occur over the life of an industry
Industry life cycle
The first stage of the industry lifecycle, characterized by (1) new products that are not known to customers, (2) poorly defined market segments, (3) unspecified product features, (4) low sales growth, (5) rapid technological change, (6) operating losses, and (7) a need for financial support
Introduction stage
The second stage of the product lifecycle, characterized by (1) strong increases in sales; (2) growing competition; (3) developing brand recognition; (4) and a need for financing complementary value chain activities such as marketing, sales, customer service, and research and development
Growth stage
The third stage of the product lifecycle, characterized by (1) slowing demand a growth, (2) saturated market, (3) direct competition, (4) price competition, and (5) strategic emphasis on efficient operations
Maturity stage
A break in industry tendency to continuously augment products, characteristic of the product lifecycle, by offering products with you were product attributes and lower prices.
Reverse positioning
A break in industry tendency to incrementally improve products along specific dimensions, characteristic of the product lifecycle, by offering products that are still in the industry but that are perceived by customers has been different.
Breakaway positioning
The fourth stage of the product lifecycle, characterized by (1) falling sales and profits, (2) increasing price competition, and (3) industry consolidation
Decline stage
A strategy of wringing as much profit as possible out of a business in the short to medium term by reducing costs
Harvesting strategy
A firm’s acquiring or merging with other firms in an industry in order to enhance market power and gain valuable assets
Consolidation strategy
A strategy that reverses a firms decline in performance and returns it to growth and profitability
Turnaround strategy
A strategy designed for a firm or a division of a firm that competes within a single business
Business-level strategy
