chapter 6

Question 1

Strategy

Answer 1

choices businesses make to achieve goals and objectives (Walmart aiming for rural areas)

Question 2

Generating Advantage

Answer 2

Custom strategy of each company is in hopes of positioning a company in its market

Examples include cost leadership, focused low cost, broad differentiation, and focused differentiation (generic strategies)

Best cost provider mixes them all

Scope vs Source

Question 3

Generating Advantage defo

Answer 3

Custom strategy of each company is in hopes of positioning a company in its market

Question 4

Generating Advantage example

Answer 4

Examples include cost leadership, focused low cost, broad differentiation, and focused differentiation (generic strategies)

Question 5

Scope:

Answer 5

either big market or narrow market

Question 6

Source

Answer 6

company either lowers cost or differentiate

Question 7

Cost Leadership

Answer 7

Low cost marketing strategy

Very efficient supply chain

Minimize costs with positive margin

Question 8

Focused Low Cost

Answer 8

Wanting to buy as cheap as possible

Can be found with low cost transport or providing little to no service

Question 9

Challenges in Pursuing a Low-Cost Strategy

Answer 9

Carried away with price cutting can bring worse results

Can only get you so far

Have to find ways to cut that others cant or will have trouble

Company focused on only cutting costs might not hear what consumers have to say

Question 10

Differentiation

Answer 10

Differentiaiton- offering a unique product

Cost doesn’t matter cause people will pay for innovation (Apple)

Doesn’t let firms ignore costs

Studies show it can bring in money but most comvience consumers they’re special

Question 11

Challenges in Pursuing a Differentiation Strategy

Answer 11

People may see as basic and others can copy

MUST be unique

Consumers must see value

Overspending is another flaw

Question 12

The Risks of a Market Niche Strategy

Answer 12

Competitiors will find ways to make capabailties

Way to avoid is by being like Marriot and having brands that encompas each of the different values

Customer base could spread, or might become to large and new companies enter comp

Question 13

Best-cost Provider Strategy

Answer 13

Mixes aspects of all these strategies

Some call it below-avg because it doesn’t make it unique enough

“Stuck in the middle”

Some must succumb to this (hospitals)

Question 14

When a Best-Cost Provider Strategy Works Best

Answer 14

Markets where differentiation is normal and a lot of frugal buyers settle with mid range products

Positions itself in the middle of the market with medium quality with below avg price or high quality product with higher than avg price

Question 15

Challenges in Pursuing a Best-Cost Provider Strategy

Answer 15

Biggest mistake is not having core functions established before adding differentiating features that usually add costs

A company with a modest degree of differentiation and no real cost advantage will most likely find itself squeezed between the firms using low-cost strategies and those using differentiation strategies

Question 16

Resource-Based Strategies

Answer 16

Strategy must be matched with internal situation created by resources, competitive capabilities, and know-hows

To be successful with a low cost strategy, must haver resources to keep costs below comp

When differentiating, needs resources to inovate

Question 17

Facets of Strategy

Answer 17

Strategy diamond- framework for checking and communicating strategy

Economic logic- how firm makes money above capital