Chapter 5 - MGT 487

during the ___ stage of the life cycle: - characterized by strong increases in sales - attractive to potential competitors - when firms can build brand recognition

growth

an overall differentiation strategy creates ____ entry barriers due to customer loyalty

higher

a pitfall of cost leadership is that the strategy is ____ too easily

imitated

generic strategies, value-creating activites, and overall objectives all vary over the course of an industry ___ ___

life cycle

the internet and digital technolgies have provided all companies with greater tools for ___ costs

managing

customers can be involved in planning and design of products and then receive these products quickly with reliable results

mass customization

the internet and digital technologies have created new ways of differentiating by enabling ____ ____

mass customization

costs leadership involves cost ____ in all activities in the firm's value chain, such as R&D, service, sales force, & advertising

minimization

the internet and digital technologies have created new ways of competing in a ___ market segment

narrow

social media allows ___ firms to solicit input and respond quickly to customer feedback

niche

differntiation implies emphasis on ___ ___ for which customers will gladly pay a premium

nonprice attributes

____ ___ leadership is based on: - creating a low-cost position relative to a firm's peers

overall cost

cost leadership involves tight costs & ___ ___

overhead control

offering products with fewer product attributes and lower prices (customers may not want an endless list of features)

reverse positioning

an overall low-cost position protects a firm against ____ from competitors

rivalry

with a focus strategy, a firm selects a ___ or group of ____ and tailors its strategy to serve them

segment(s)

learning to lower costs through experience

the experience curve

disintermediation lowers ____ costs

transaction

lowered ___ ___ allow firms to achieve parity on cost while providing a unique experience

transaction costs

a ____ strategy invovles reversing performance decline & reinvigorating growth toward profitability through - asset and cost surgery - selected market and product pruning - piecemeal productivity improvements

turnaround

differentiation implies products and/or services that are ___ & ___

unique & valued

differentiation requires integration of multiple points along the ___ ___

value chain

what are the two variants of a focus strategy?

1. cost focus 2. differentiation focus

the industry life cycle consists of what 4 components?

1. introduction 2. growth 3. maturity 4. decline

to sustain a competitive advantage, use porter's three generic strategies:

1. overall cost leadershpi 2. differentiation 3. focus

offering products that are still in the industry but that are perceived by customers as being different (a product escapes its category by associating with a different category)

breakaway positioning

business-level strategies require a ____

choice

with a focus strategy, a firm achieves ___ ____ by dedicating itself it these segments exclusively

competitive advantages

introduction, growth, maturity, and decline are the stages of the ___ life cycle

industry

a pitfall of cost leadership is an increase in the cost of ____ on which the advantage is based

inputs

the ____ and ___ technologies lower transaction costs

internet and digital

during the _____ stage of the life cycle: - products are unfamiliar to consumers - market segments are not well-defined - product features are not clearly specified - competition tends to be limited

introduction

a ___ strategy is based on the choice of a narrow competitive scope within an industry

focus

a ___ strategy requires narrow product lines, buyer segments, or targeted geographic markets

focus

a focus strategy rquires narrow product lines, buyer segments, or targeted ____ ____

geographic markets

what are the two strategies that managers can use to affect customers' mental shifts?

1. reverse positioning 2. breakaway positioning

(one of the variants of focus strategies) - creates a cost advantage in its taret segment - exploits differences in cost behavior

cost focus

differentiation requires a level of ___ ____ relative to competitors

cost parity

cost leadership involves vigorous pursuit of ___ ___ from experiences

cost reductions

during the ___ stage, a strategy is to harvest profits and reduce costs

decline

the ___ stage is when - industry sales and profits begin to fall - industry consolidation occurs

decline

- uniqueness that is not valuable - too much differentiation - too high a price premium - dilution of rband identification through product line extensions these are pitfalls of ____

differentiation

a ____ strategy can take many forms: - prestige or brand image - technology - innovation - features - customer service - dealer network

differentiation

a focus strategy requires advantages obtained either through ____ or cost leadership

differentiation

which focus strategy variant differentiates itself in its target market?

differentiation focus

which focus strategy variant exploits the special needs of buyers?

differentiation focus

the process of bypassing buyer channel intermediaries such as wholesalers, distributors, and retailors

disintermediation

cost leadership invovles aggressive construction of ___ ___ facilities

efficient scale

overall cost leadership is based on managing relationships throughout the ___ ___ ___ to lower costs

entire value chain

a pitfall of focus strategy is the ___ of cost advantages within a narrow segment

erosion

(with internet-enabled focus strategies) customers can access markets less ____, and small firms can extend their reach

expensively

cost leadership requires learning to lower costs through ____

experience

a pitfall of cost leadership is reduced ____

flexibility