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Baylor Norris Terms in this set (30)business-level strategy an integrated set of actions to gain a competitive advantage by exploiting core competencies (in specific product markets.) market segmentation dividing a market into meaningful, relatively similar, and identifiable segments or groups cost leadership strategy produce goods or services with features that are acceptable to customers at the lowest relative cost differentiation strategy to produce goods or services (at an acceptable cost) that customers view as being different and important. focus strategy actions taken to produce goods or services that serve the needs of a particular competitive segment integrated cost leadership/ differentiation strategy engaging in primary & support activities that allow a firm to pursue both total quality management (TQM) an organizations total commitment to the customer and to continuous improvement of every process What is the purpose of a business level strategy? -to create
differences between a firms position and its competitors. 5 business-level strategies 1) Cost Leadership Firms that seek competitive advantage through Cost Leadership Strat... produce standardized products for an industry's typical consumer at low cost. 3 Competitive risks with Cost Leadership strategy 1) Loss of competitive advantage by new tech. Competitive Adv. through Differentiation Strat. firms provide products with different (and valued) features 4 Risks with Differentiation Strategy 1) Customers decide the differentiation is no longer
unique compared to the comp. thus not worth the premium price. 3 Competitive Risks with Focus Strategies 1) Comp's ability to use core
competencies to "out-focus" the focuser by serving a more narrowly defined market segment 3 examples of specific markets that Focus Strategy targets 1) Particular buyer group (i.e. youth vs seniors) Purpose of Integrated cost leadership/differentiation Strategy To provide customers with relatively low-cost products that also have valued differentiated features Primary risk of the Integrated strategy ("stuck in the middle") firm might not produce products that offer sufficient value in terms of either low cost or differentiation. Firms develop and use TQM systems to: (3) (RIC) 1) Increase customer satisfaction Flexible Manufacturing Systems (FMS) Def. Integrates human, physical, and information resources to create (relatively) differentiated products at (relatively) low costs. Goal of FMS Eliminate the low cost vs. product variety tradeoff Example of an information network Customer Relationship Management (CRM) 2 types of target markets 1) Broad Market: Use capabilities to create value to customers on an industry-wide basis 2) Narrow Market: Serve the needs of a narrow group of customers earn above avg. returns in spite of strong competitive forces Effective use of the cost leadership strategy allows a firm to... When trying to find out the business level strategy, companies analyze what 2 types of potential competitive advantages? 1. Lower cost than rivals In terms of customers, when selecting a business level strategy the firm determines...(3) 1) WHO will be served 3 Dimensions of customer relations (RRA) 1) Reach Reach Dimension The firms access & connection to customers Importance: adding customers... Richness dimension The depth/detail of the 2-way flow of information between firm and customers Importance: to establish a competitive adv. Affiliation Dimension Concerned with facilitating useful interactions with customers Importance: produces fewer complaints, enhancing satisfaction ... ... Sets with similar termsBusiness Strategies- Test 1: Chapter 420 terms clayton_allison BUSA 4980 CHAPTER 447 terms rmontrois1 Chapter 4 - Business Level Strategy23 terms superdmalmstrom Business Level Strategy52 terms Ferrari594 Sets found in the same folderchapter 558 terms Eric_Hsia Chapter 1: Strategic Management and Stra…37 terms tearap Chapter 1: Strategic Management34 terms tayleresmith Strategic Management- Chapter 162 terms anju_endo Other sets by this creatorSAFE Exam Prep411 terms preston_alvarado Real Estate Finance Exam #3106 terms preston_alvarado Real Estate Investments Test #2181 terms preston_alvarado Real Estate Finance Exam #1 TRID Questions34 terms preston_alvarado Recommended textbook solutions Operations Management: Sustainability and Supply Chain Management12th EditionBarry Render, Chuck Munson, Jay Heizer 1,698 solutions
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What are the risks of cost leadership strategy?In some settings, the need for high sales volume is a critical disadvantage of a cost leadership strategy. Highly fragmented markets and markets that involve a lot of brand loyalty may not offer much of an opportunity to attract a large segment of customers.
What are the risks of differentiation strategy?The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. Additionally, various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments.
What are the 3 primary risks of cost advantage leadership strategies?4 Disadvantages of Using a Cost Leadership Strategy. The cost leadership approach can be risky. Cost leaders must constantly innovate new ways to reduce costs. ... . It may be difficult to maintain perceptions of quality. ... . Cost leaders are dependent on a high volume of sales. ... . Cost leaders may be slow to adapt to market changes.. |
What are the risks of an integrated cost leadership differentiation strategy quizlet?
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