Chapter 8 Flashcards
It is a statement that identifies a business’s strategies to compete, its goals and the plans and policies that will be required to carry out those goals
Competitive Strategy
It provide a competitive advantage by helping an organization implement its strategic goals and increase its performance and productivity`
Strategic Information System (SIS)
What is the best-known for analyzing competitiveness
Michael Porter’s competitive forces model
Enumerate the 5 major forces that can endanger or enhance a company’s position in a given industry
- The threat of entry of new competitors
- The bargaining power of suppliers
- The bargaining power of customers
- The threat of substitute products and services
- The rivalry among existing firms in the industry
It is a product or service feature that customers have learned to expect from organizations in a certain industry
Entry barrier
It is high when buyers have a few choices from whom to buy and low when buyers have many choices
Supplier power
It is high when buyers have many choices from whom to buy and low when buyers have few choices
Buyer power
It reduce buyer power
Loyalty programs
It allows companies to track the activities and accounts of millions of customer’s accounts thereby reducing buyer power
Information Technology
They are in greatest danger from substitutes
Information-base industries
Who uses the Porter competitive forces model to design general strategies?
Organizations
What model do organizations use to identify specific activities where they can apply competitive strategies for the greatest impact?
Value Chain Model
It shows point where an organization can use information technology to achieve competitive advantage
Value Chain Model
What are the two categories of activities in an organization according to Porter’s Value Chain Model?
- Primary
- Support Activities
What business activities relate to the production and distribution of a firm’s products and services, creating value that customers are willing to pay for?
Primary activities
Enumerate the 5 Primary Activities
- Inbound Logistics (inouts0
- Operations (manufacturing and testing)
- Outbound logistics (storage and distribution)
- Marketing and sales
- After-sales services
Enumerate the 4 Support Activities
- Administration and management
- Human Resource Management
- Product and Technology Development
- Procurement
Activities under Administration and Management
- Legal
- Accounting
- Finance Management
Activities under Human Resource Management
- Personnel
- Recruiting
- Training
- Career Development
Activities under Product and Technology Development
- Product and process design
- Production Engineering
- Research and Development
Activities under Procurement
- Supplier Management
- Funding
- Subcontracting
- Specification
It involves quality control, receiving raw materials, control supply schedules
Inbound Logistics
It involves manufacturing, packaging, production control and quality maintenance
Operations
It involves finishing goods, order, handling, dispatch, delivery, invoicing
Outbound logistics
It involves customer management, taking order, sales promotion, market analysis research
Marketing and Sales
It involves warranty, maintenance, education and training upgrades
Customer Service
It can be applied to any or all of the primary activities
Support Activity
A firm’s value chain is a part of a larger stream of activities, which porter calls a _______.
Value System
It includes the suppliers that provide the inputs necessary to the firm and their value chains.
Value System (or industry value chain)
Enumerate the 5 strategies for Competitive Advantage
- Cost Leadership Strategy
- Differentiation Strategy
- Innovation Strategy
- Operational Effectiveness Strategy
- Customer Orientation Strategy
This strategy produce products and/or services at the lowest cost in the industry
Cost Leadership Strategy
This strategy offer different product features
Differentiation Strategy
This strategy introduce new products and services, add new features to existing products and services, or develop new ways to produce them
Innovation Strategy
This strategy improve the manner in which internal business processes are executed so that a firm performs similar activities better than its rivals
Operational effectiveness strategy
This strategy concentrate on making customers happy
Customer orientation strategy
