Final 🥲 Flashcards
differentiation
differentiating products by creating something uniuqe
differentiation requirements
-products must be valuable and different, with unique attributes
-targets customers in smaller segments
-low volume, high margin
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cost leadership
-little differentiation
-high volume, low margin
-offer better value to customers
cost leadership risks
-strategy is imitated too easily
-lack of equality on differentiation
-reduced flexibility
-too much focus on one or a few value chain activities
differentiation risks
-uniqueness is not valuable
-too much differentiation
-too high a price premium
-differentiation that is easily imitated
related diversification
horizontal relationships
unrelated diversification
vertical relationships
how related diversification leads to economies of scope
leveraging core competencies, sharing activities
how related diversification leads to market power
pooled negotiating power, vertical integration
problems from acquisitions
-high takeover premium
-imitable advantages realized and copied synergies
-managers ego
-cultural issues
simple structure
-small businesses
-highly centralized
-leader makes all decisions
-oldest and most common
-little specialization
functional structure
-specialists in various areas (accounting, marketing, engineering)
-leader manages departments
-single or closely related products
-high production volume
-some vertical integration
functional structure advantages
-enhanced coordination and control
-managerial and technical talents used more efficiently
-more opportunities for professional development
divisional structure
-organized around products, projects, or markets
-each division has its own specialist
-each division managed by corporate office
divisional advantages
-separation of strategic operational control
-quicker responses to changes
-rewards and career paths are linked to the development of general management talent
matrix structure
-combo of divisional and functional
-functional departments are combined with product groups
-functional departments work under a project group manager
matrix structure advantages
-facilitates the use of specialized personnel, equipment, and facilities
- allows individuals with a high level of
expertise to divide their efforts among multiple projects
-more efficient use of resources
resource similarity
the degree to which rivals draw on the same types of resources to compete
5 reasons for competitive actions
- Improve market position
- Capitalize on growing demand
- Expand production capacity
- Provide an innovative new solution
- Obtain first mover advantages
entrepreneur opportunities
- often come from past work experience
-emerge due to some change in the business environment
viable opportunities
attractive, achievable, durable, value-creating
offshoring
when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location
to reduce power of suppliers
-increase number of suppliers
-become an important customer of supplier
to reduce power of buyers
-increase number of buyers
-differentiate products
to reduce intensity of rivalry
-differentiate products
-lower prices
why is it important to consider industry life cycles
managers must become even more aware of their firm’s strengths and weaknesses in many areas to attain competitive advantages
maintaining
refers to keeping a product going without significantly reducing marketing support, technological development, or other investments in the hope that competitors will eventually leave the market
harvesting
involves obtaining as much profit as possible and requires that costs in the decline stage be decreased quickly
exiting
involves dropping the product from a firm’s portfolio
consolidating
one firm acquiring the best of the surviving firms in an industry at a reasonable price
international strategy
A firm without a strong emphasis on either differentiating their product and service offerings in order to adapt to local markets or on lowering costs
global strategy
A firm whose emphasis is on lowering costs
multidomestic strategy
emphasis is on differentiating their product and service offerings in order to adapt to local markets
transnational strategy
strive to optimize the trade-offs associated with efficiency, local adaptation, and learning
restructuring
corporate office tries to find either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change
above average returns
means good investment
G7
canada, france, germany, italy, japan, uk, us
BRICS
brazil, russia, india, china, south africa
NAFTA
north american free trade agreement, canada, mexico, us
conglomerate
company that owns multiple diff businesses in diff industries
economies of scale
spreading the costs of production over the number of units produced
switching costs
costs when buyer/supplier switches to another buyer/seller
strategic groups
help to identify mobility barriers, marginal competitive position, the firms’ strategies, industry trends
primary activities
inbound logistics, operations, outbound logistics, marketing/sales, service
support activities
procurement, technology, HR management, general admission
triple bottom line
assessment of environmental, social, and financial performance
