MGT Chapter 5

Mass Customization

A firm's ability to manufacture unique products in small quantities at low cost.

Competitive Parity

A firm's achievement of similarity, or being "on par" with competitors with respect to low cost, differentiation, or other strategic product characteristics.

Focus Strategy

A firm's generic strategy based on appeal to a narrow market segment within an industry.

Overall Cost Leadership

A firm's generic strategy based on appeal to the industry-wide market using a competitive advantage based on low cost.

Differentiation Strategy

A firm's generic strategy based on creating differences in the firm's product or service offering by creating something that is perceived industry-wide as unique and valued by customers.

Business Level Strategy

A strategy designed for a firm or a division of a firm that competes within a single business.

Turnaround Strategy

A strategy that reverses a firm's decline in performance and returns it to growth and profitability.

Generic Strategies

An analysis of business strategy into basic types of based on breadth of target market (industry wide vs. narrow market segment) and type of competitive advantage (low cost vs. uniqueness).

Combination Strategies

Firms' integrations of various strategies to provide multiple types of value to customers.

Consolidation Strategy

In the decline stage, this is a firm's acquiring or merging with other firms in an industry in order to enhance market power and gain valuable assets.

Reverse Positioning

In the maturity stage, this is a break in industry tendency to continuously augment products, characteristics of the product life cycle, by offering products with fewer product attributes and lower prices.

Breakaway Positioning

In the maturity stage, this is a break in industry tendency to incrementally improve products along specific dimension, characteristic of the product life cycle, by offering products that are still in the industry but that are perceived by customers as being different.

Digital Technologies

Information that is in numerical form, which facilitates its storage, transmission, analysis and manipulation.

Experience Curve

Key to overall cost leadership, it is the decline in unit costs of production as cumulative output increases.

Decline Stage

The fourth stage of the product life cycle, characterized by falling sales and profits, increasing price competition, and industry consolidation.

Introduction Stage

The industry life cycle that is characterized by new products that are not known to customers, poorly defined market segments, unspecified product features, low sales growth, rapid technological change, operating losses, and a need for financial support.

Disintermediation

The process of bypassing buyer channel intermediaries such as wholesalers, distributors, and retailers.

Growth Stage

The second stage in the product life cycle that is characterized by strong increases in sales, growing competition, developing brand recognition, and a need for financing complementary value chain activities such as marketing, sales, customer service, and R&D.

Industry Life Cycle

The stages of introduction, growth, maturity, and decline that typically occur over the life of an industry.

Maturity Stage

The third stage in the product life cycle characterized by slowing demand growth, saturated markets, direct competition, price competition, and strategic emphasis on efficient operations.

Profit Pool

The total profits in an industry at all points along the industry's value chain.

Harvesting Strategy

Used in the decline stage, this is a strategy of wringing as much profits out as possible out of a business in the short to medium term by reducing costs.