Lesson 4 Flashcards
It refers to any obstacle or resistance within a market that inhibits the smooth operation of buying and selling goods or services
Market Friction
It represents the various challenges and obstacles that can impede the successful introduction and adoption of a new product in the market
Market Friction
is any point that slows or stops the movement of goods through the supply chain process.
Supply Chain Bottle neck
can happen for various
reasons, such as labor shortages,
component shortages, infrastructure
problems.
Bottlenecks
If you’re having a hard time
getting a certain material due
to a shortage, you might not be
able to meet customer
demand. Unmet demand
equals lost revenue
Bottlenecks problems
Challenges cause by supply chain bottlenecks
Increased Costs
Customer Dissatisfaction
Delivery Delays
Lost Revenue
is the ability to see and track your inventory: how much you have, what products you have, and where it all is
Inventory Visibility
Supplier might not tell company
about supply constraints, raw
material shortages, or delays on
certain products
Communication
How can one improve communication?
by setting clear expectations,
measuring performance, and
occasional check-in meetings
Having insufficient labor to fulfill
all your orders & Running out of warehouse space to hold inventory
Production Capacity
Not having the right technology
to aid material procurement and
order fulfillment
Production Capacity
How to increase Production Capacity?
- Upgrade systems, management software, and equipment
- Increase staff
- Assess your order management system and fix your pain points
Causes of Transportation Infrastructure
- Delayed shipping from your
supplier. - Delayed shipping to your
customer via carriers. - Slow last-mile delivery due to a
lack of proper technology or a
shortage of truck drivers
Prevention of transportation Infrastructure
Partnering with a third-party
logistics provider who can handle
all your order packing and
shipping.
* Using the carrier closest to your
distribution center will also help
you cut down on transit times and
costs.
* handle last-mile delivery on your
own.
What’s the contingency plan to prevent supply chain bottleneck
*Tiered approach when choosing suppliers.
* Have backup suppliers for emergencies.
* Increase your safety stock to avoid supply chain shortages,
especially for products with long lead times
____________ of a product varies with the relative level of importance consumers place on price compared to other purchasing criteria.
Price sensitivity
Factors that affect price sensitivity
- Demand
- Competition
- Location and Income
- Exclusivity
- Quality
The higher the
________ for
something, the
higher price
customers may be
willing to pay.
Demand
When companies in
similar industries
offer similar products
or services to the
same customer base.
Competition
Companies might
consider variable
pricing to provide
appropriate pricing
to customers in
different locations
Location and income
Customers may be more likely
to pay higher prices based on
the limited availability of certain
products
Exclusivity
The craftsmanship of a
product’s assembly or the
level of experience a service
provider has an effect on
the prices
Quality
Psychological pricing tactics
Price anchoring
Charm pricing
Odd-even Pricing
Decoy pricing
Center stage
recognizes that consumers tend to depend too heavily on an initial piece of information when decision-making
Price anchoring
Best for companies with a tiered pricing model that offers various versions and associated features of the core product, at different prices
Price anchoring
refers to the use of prices
ending in the number nine because of
the “left-digit bias
Charm Pricing
Best for companies with non-luxury
products that want to convey a “deal.”
Charm Pricing
This tactic leverages the belief that,
psychologically, buyers are more
sensitive to certain ending digits.
Odd-even pricing
This pricing works best for luxury items
Even pricing
This pricing tends to work best for
most other products.
Odd Pricing
based on the
“decoy effect,” by which individuals
tend to have a specific change in
preference between two options when
also presented with a third option that is inferior in every way except one
Decoy pricing
Best for Companies that have a
preferred option(s) to which they want
to direct customers
Decoy pricing
Pricing which dictates
that, out of a range of products
presented side-by-side, we tend to be drawn to the one situated in the middle
Center stage pricing
the art of setting your
products or services at a particular price point that aligns with the perceived value by your customers
Price positioning
strategy involves pricing your
products or services at a
premium, targeting customers
who place value on quality or
exclusivity
Premium pricing
is often used by luxury products, high-end services, and premium brands.
Premium pricing
This strategy involves pricing your
products or services at a lower
price point to attract customers
and gain a foothold in the market
share.
Penetration pricing
can be an effective way to generate sales quickly, attract price-sensitive
customers, and create brand
awareness.
Penetration pricing
This strategy involves pricing your
products or services at the lowest
possible price to attract cost-sensitive customers.
Economy pricing
is often used by discount stores, budget airlines, and other low-cost providers.
Economy Pricing
This strategy involves pricing your
products or services at a high
introductory price point before
gradually reducing the price over
time, targeting early adopters or
customers who are willing to pay
a premium for new products or
services
Skimming Pricing
This strategy involves pricing your
products or services based on the
prices of your competitors.
Competitive pricing
While this strategy can help
businesses remain competitive, it
may require constant price
monitoring to maintain market
position and may result in lower
profit margins
Competitive pricing
Analyzes the entire competitive
environment to give a comprehensive
overview of the industry.
Competitive Landscape analysis
Competitive Landscape analysis is all bout identifying what?
- Competitors
- Competitors position
- The strengths and weaknesses of
competing products - Becoming familiar with the trends and developments in the industry
The strengths and weaknesses of one of your competitors, the threats they pose, and the opportunities for growth
afforded by the gaps between their
strengths and weaknesses and your
own.
SWOT ANALYSIS
Understanding the current political and
economic climate impacting the industry right now, getting the sense of how the industry might begin to change over time
PESTLE ANALYSIS
Techniques for Analyzing Industries and Competitors, that five competitive
forces interoperate to “determine the
attractiveness of an industry”, going into detail as to “how these forces change over time and can be influenced through
strategy”.
Porter’s Five Forces
A portfolio planning method that
evaluates a company’s Strategic
Business Units in terms of its market
growth rate and relative market share
Growth Share Matrix (BCG MATRIX)
represents industry
attractiveness, while relative market
share stands for competitive advantage.
Market Growth
They are the leaders in the business
It leads to large amount of cash
consumption & cash generation
Stars (High growth, High Market share)
- Foundation of the company & often the
stars of yesterday - Located in an industry that is mature not
growing or declining
Cash Cows (Low growth, High Market Share)
- The start of most business
- Has potential to become star & evenly
cash cow but can also become dog
Question Marks (High Growth, Low
Market Share)
- are the cash traps
- Business is situated at a declining stage
Dogs (Low Growth, Low Market Share)
