Ch. 6

As JetBlue grew, what occurred during the years following 2007?

It suffered a competitive disadvantage

The ___ determines whether to pursue a specific narrow part of the market or to go after the broader market

Scope of competition

Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs ____

Stay the same

The perceived value that a company creates for consumers less the company's costs to create the value equals ____

The economic value created

A tablet manufacturer that includes a free stylus with every purchase is using ____ to enhance users' experiences and increases the perceived value of its tablets

Complements

Value drivers known as ___ add value to a product or service when they are consumed in the tandem with the focal product

Complements

A ___ strategy requires achieving the lowest costs in the industry while maintaining a level of value that is acceptable to customers

Cost-leadership

Which two variable can managers primarily manipulate in order to answer the question, "How should we compete?"

1. Cost 2. Value

What two things determine a firm's competitive advantage?

1. Cost position relative to competitors 2. Value position relative to competitors

What are considered to be the two generic business-level strategies?

1. Differentiation 2. Cost-leadership

In terms of business strategy, blue oceans represent what? (2 things)

1. Increased demand 2. Untapped market space

Two important features that managers can adjust in an effort to improve the firm's strategic position are ____

1. Product features 2. Customer service

If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from what?

An experience-curve effect based on process innovation

A manufacturer of electronic components can use its manufacturing machines to produce many different components. The firm benefits from an ___, reducing overall production costs by finding multiple uses for its components and facilities

Economy of scope

The cube-square rule makes it ___ for smaller stores to compete with larger retailers

Harder

Managers must make strategic trade-offs involving choices between cost and value because ____

Higher value tends to require higher costs

Different value drivers contribute to competitive advantage only if ___

The increase is perceived value exceeds the corresponding cost increase

For a differentiation strategy to strengthen a company's strategic position and boost its competitive advantage, an increase in _____ must exceed the increase in _____

Value creation ; costs

A graphical depiction of a firm's relative performance across its industry's factors of competition is known as a ___

Value curve

A ____ outlines the steps a manager will take to achieve competitive advantage in a single product market

Business-level strategy

A ___ requires making a choice between a cost position and a value position

Strategic trade-off

A cost leader can achieve a competitive advantage by ___

reducing costs below those of competitors while maintaining a similar value

What are 3 examples of input factors?

1. Raw materials 2. Labor 3. Capital

A company's strategic profile based on value creation and cost in a specific product market is the company's ___

Strategic position

A firm that pursues a differentiation strategy will often find that the added expense of offering new or unique product features offsets the increase in perceived value, and profit margins begin to erode. This underscores the importance of ___ for firms pursuing a differentiation strategy

Cost control