Session 3 Flashcards
(21 cards)
Can you give an example of a buying firm which end badly ?
Ex: Mellon Bank buy Boston Company (Asset management company), manager in Bank were not paid a lot but Boston Company’s managers have a luxury lifestyle. After the MNA, Boston Company’s manager were told to abandon their luxury culture. Conflicts, people leave the company and customers did it also
Can you give an example of different company culture in Amazon/Whole food market ?
Whole Food Market provide also Book reading team and yoga classes , so it’s not the same corporate culture
How can you use 5 Forces Model ?
You can use it to analyze Industry Attractiveness
How do you have a high economic value ?
2 strategies:
- Have high value proposition
Or
- Reduce the cost
What are the 2 types of Focused Business Strategies ?
2 Focused business :
1) Focused Differentiation (Ex: Mont Blanc expensive pens)
2) Focused Cost Leadership ( Ex: BIC - disposable pens and lighters at low)
What are the 2 types of Broad Business Strategies ?
2 types of Broad Business Strategies:
1) Broad Differentiation (Ex: Apple - Iphone)
2) Broad Cost Leadership (ex: Wall-Mart)
What is a differentiation strategy ?
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Example of perceived value which decrease
Different depression drugs : Lilly’s prozac and Pfizer’s Sertraline, side effect, less demand less value
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Firm B is diffirentiating for firm A.
Firm B has less cost than Firm C -> Firm has more economic value
3 drivers that increase perceived value ?
3 drivers that increase perceived value :
1) Product features
2) Customer service
3) Complements (Pepsi also have Lay’s chips so it’s augmented they’re value).
Example for buying Next cd-rom computer
1986 Lisa computer
1990 Next computer
Value increase but the cost of products increase a lot
What are the goals of cost leadership strategy ?
1) Reduce cost below competitors
2) Offer adequate value
3) Reduce prices for customers
4) Optimize the value chain for low cost
What are the drivers that keep costs low ?
1) COst of input factors
PAS FINI
Ex of economiy of scope
ex: Touch Screen for Iphones and Ipad.
What is an diseconomy of scale ?
Firm too big
Economy of scale - Output per year (time-period)
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Economies of Learning - Cumulative Outputs
Tesla’s to produce their vehicules
How to read the learning and experience curve for firm A and B ?
Everytime you double your production/cumulative outputs, you got 10% lower of costs
What is Blue Ocean Strategy ?
Blue Ocean Strategy = A strategy that combine both differentiation and cost-leadership activities
Examples of Focused Cost Leadership
Ex: Cosco
For : Small business people
What is Stuck in the Middle ?
You do not have high value, nor lost cost.
Ex: Toyota, shi tong, JetBlue
