Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/33

Click to flip

33 Cards in this Set

  • Front
  • Back
Name four techniques to analyze and forecast the economic environment.
1. scanning
2. monitoring
3. forecasting
4. assessing
Describe scanning.
A study of all segments in the general environment.
Describe monitoring.
A study of environmental changes identified by scanning to identify important trends.
Describe forecasting.
Developing probable projections of what might happen and its timing.
Describe assessing.
Determining changes in the firm's strategy that are necessary as a result of the information obtained.
Name four different types of industries.
1. perfect (pure) competition
2. pure monopoly
3. monopolistic competition
4. oligopoly
Describe perfect (pure) competition.
A market characterized by a large number of small producers that sell a vertually identical product.
How do firms compete in a perfectly competitive market?
On the basis of price.
Describe a pure monopoly.
A market in which there is a single seller of a product or service for which there are no close substitutes.
Name four reasons for a monopoly.
1. increasing returns of scale
2. control over the supply of raw materials
3. patents
4. government franchise
Describe a natural monopoly.
When economic or technological conditions permit only one efficient supplier.
How long will monopolists continue to produce and sell products?
As long as average variable cost is less than marginal revenue.
Describe monopolistic competition.
A market that is characterized by many firms selling a differentiated product or service.
What are the strategies of firms in monopolistic competition?
Focus on product or service innovations, product developments, and advertising.
Describe oligopoly.
A market characterized by significant barriers to entry.
What is the nature of competition in an oligopoly?
Nonprice competition is most common, but price competition can become fierce during economic downturns.
Name the five industry forces used in analyzing the industry.
1. competitors
2. potential entrants into the market
3. equivalent products
4. bargaining power of customers
5. bargaining power of input suppliers
Name three techniques for industry analysis.
1. competitor analysis
2. price elasticity analysis
3. target market analysis
Describe competitor analysis.
Involves gathering information about competitors' capabilities and using the information to understand the competitors' behavior.
Describe price elasticity analysis.
Involves using historical information to determine the price elasticity of demand for the firm's product.
Describe target market analysis.
Obtaining a thorough understanding of the market in which the firm sells its products.
How is a SWOT analysis used in developing business strategies?
Identifies strengths, weaknesses, opportunities and threats.
Name the two basic business strategies that firms generally pursue.
1. product differentiation
2. cost leadership
Describe product differentiation.
Involves modification of a product to make it more attractive to the target market or to differentiate it from competitors' products.
Name three ways in which products can be differentiated.
1. physical characteristics
2. perceived differences
3. support service differences
Describe cost leadership.
Involves focusing on reducing the costs and time to produce, sell, and distribute a product or service.
Name five techniques that may facilitate cost reductions.
1. process reengineering
2. lean manufacturing
3. supply chain management
4. strategic alliances
5. outsourcing
Describe process reengineering.
Redesigning existing processes.
Describe lean manufacturing.
Identification and elimination of all types of waste in the production function.
Describe supply chain management.
The sharing of key information from the point of sale to the final consumer back to the manufacturer, the manufacturer's suppliers, and the supplier's suppliers.
What is the objective of supply chain management?
To reduce time, defects, and costs all along the supply chain.
Describe stategic alliances.
Involve collaborative agreements between two or more firms.
Describe outsourcing.
Involves contracting for the performance of processes by other firms.