Class 05 Flashcards
competitive advantage (class 07)
1
Q
when does a firm have competitive advantage?
A
achieves higher profitability than the industry average
2
Q
what ways can firms obtain competitive advantage?
A
- cost leadership
- differentiation
- broad market
- narrow market
3
Q
what is cost leadership?
A
lower cost
4
Q
what is differentiation?
A
premium prices
5
Q
what is cost leadership strategy?
A
- asset investment to lower prices
- mid quality at lowest cost
6
Q
what is the goal of a cost leadership strategy?
A
achieve significant cost gap over competitors
7
Q
what is differentiation strategy?
A
- provide G/S in superior quality
- incur costs to improve quality
8
Q
what does differentiation mean?
A
premium quality + price is their edge
