Cost Leadership & Differentiation
cost advantage
obtaining a ___ ___: Determine and control cost drivers -> Reconfigure Value Chain as needed
differentiation
A ____ strategy may fail when the focus of the competition shifts to price rather than unique product features
business-level strategy
A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.
generic stategies
Cost Leadership & differentiation are called ___ ___ because they can be used by any organization
fail
Firms that try to do both (cost leadership & differentiation) ___ to become masters at doing either one.
cost leadership
Risk of ___ ___: focus on efficiency may blind firm to changes in customer preferences
Differentiation Strategy
Risks of __ ___: The means of uniqueness may no longer be valued by customers
Differentiation Strategy
Risks of ___ ___: Competitors may learn to imitate value chain or counterfeit products
Focused Strategy
Risks of ___ ___: Firms may be "out-focused" by innovative competitors
Focused Strategy
Risks of ___ ___: Lack of economies of scale and bargaining power
Focused Strategy
Risks of ___ ___: Large competitors may enter niche market
Focused Strategy
Risks of ___ ___: Preferences of niche customers may change and become similar to those of broad market
Differentiation Strategy
Risks of ____ ___: Customers may decide that cost of uniqueness is too great
False
T/F A differentiator will always benefit when products have become commoditized.
true
T/F: A cost leader is the firm most likely to survive a price war.
False
T/F: Differentiation and cost leadership strategies are only effective in manufacturing industries.
differentiation
The viability of a ____ strategy is severely undermined when the focus of competition shifts to price rather than value-creating features.
differentiation strategy
Value provided by unique features & performance -Superior quality -High customer service -Prestige or exclusivity -Rapid innovation
business-level
a ___ ___ strategy outlines the steps a manager will take to achieve competitive advantage in a single product market.
business-level strategy
a company's goal-directed plans regarding how to compete for advantage
differentiation strategy
command premium price
economies of scope
describe the savings that come from producing two (or more) outputs at less cost than producing each output individually, even though using the same resources and technology
cost leadership
risk of ___ ___: Competitors may learn how to imitate value chain
cost leadership
risk of ___ ___: Process technology innovations may eliminate cost advantage
cost leadership
risk of ____ ____ : Competitors may learn how to imitate value chain
cost leadership
risk of ____ ____ : Focus on efficiency may blind firm to changes in customer preferences
cost leadership
risk of ____ ____ : Process technology innovations may eliminate cost advantage
scope of competition
the ___ __ ___ determines whether to pursue a specific narrow part of the market or to go after the broader market.
experience curve
the concept of an ___ ___ attempts to combine both learning effects and process improvements.
differentiation strategy
•Requirements -Develop new systems and processes -Shape perceptions through advertising -Quality focus -R&D capability -Maximize human resource contributions through low turnover high motivation
