Strategic Management Test 2
a typical cost leadership strategy involves
A and B
Porter's value chain
B and C
cost leaders are frequently
B and C
competitive advantage can be defined as
a firms ability to earn a persistently higher profit rate than its rivals
rivals can be pre-empted from entering a form's market only if
A and B
Singapore airlines appears to have competitive advantage from
all of the above
according to porter and Siggelkow, Urban Outfitters was successful because
all of the above
being stuck in the middle gives low profits because
all of the above
causal ambiguity and uncertainty imitability are
all of the above
the central task of a differentiation strategy is
all of the above
strategic innovation means introducing
all of the above, or introducing new ways of doing business
how can a firm hide its superior profits
any of the above
porter says that firms get stuck in the middle because
as a above a firms needs very different organizational processes to achieve the closest costs or effective differentiation in the industry
isolating mechanisms are
barriers that slow or step the equalization of profits between firms, such as barriers to imitation
the fundamental choice for capacity acquisitions is the decision to either
buy them or build them
the seven drivers of cost advantage
can be useful framework within which to compare a firm's cost with its competitors
when using value chain analysis to analyze a firm's competitive strategy, the main aim is to
compare costs with those of competitors
a firms ability to turn change in its external environment into profit
depends on its ability to respond by changing its capabilities appropriately
competitive advantage
emerges from external and internal sources
cost leadership means a firm must
explore all sources of cost advantage in providing customers with a standardized product
Overall, the singapore airlines case shows that
firms can create cultures that do motivate staff to continually eliminate waste, reduce costs and improve customer service
if an industry has a stable environment and firms pursue similar strategies
firms with similar resources and capabilities should have similar profit rates
to successfully imitate the strategy of another firm, an organization must
identify and diagnose the rivals advantage, believe in its ability to deliver a superior return, and finally acquired the necessary resources and capabilities
A firm can pre-empt imitation by
introducing new products to fill each niche, investing in capacity ahead of market growth, and filing many patents
Porter (1980) in his early work suggests that combining cost leadership and differentiation strategies
is likely to result in a firm becoming 'stuck in the middle'
In many industries the market leaders
manage to reconcile low costs with some effective differentiation
differentiation is when a firm
offers customers something valuable and unique for which customers are willing to pay a price premium
requirements for quick organizational response to a turbulent environment are
quick, accurate info, and short product launch cycle times
the success of Japanese Total Quality Management
refutes the perceived trade-off between low cost products and high quality products
A cost leadership strategy
requires a firm to product a no frills product - even if the industry's product is differentiable
once established, competitive advantage is
subject to erosion by competitors or entrants
competitive advantage depends on
the existence of market imperfections
Zara's response to a very fast changing fashion demand was
to cut the product launch cycle from concept to store in three weeks
to imitate the competitive advantage of another company a firm must first
understand the basis of its rival's success
