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6 Cards in this Set
- Front
- Back
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Five forces model What 2 types? Why is it important to identify these forces? |
Help organizations determine the potential profitability of an industry: industry structure, competitive strategy, value chains, business processes, IS Competitive forces (Switching costs, customer loyalty): Competition from vendors of substitutes Competition from new competitors Competition from existing rivals (Each of the three competitive forces concerns the danger of customers taking their business elsewhere) Supply chain bargaining power (Availability of substitutes, relative size): Bargaining power of suppliers Bargaining power of customers To identify sources of strong competition and use that knowledge to create a competitive strategy to combat those strong forces. |
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What are the four competitive strategies? |
Industry-wide, cost = Lowest cost across the industry Industry-wide, differentiation = Better, product/ service across the industry Focus, Cost = Lowest cost within an industry segment Focus, Differentiation = Better, product/service within an industry segment |
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Define value Define Margin Define value chain Define Primary activities Define support activities |
The amount of money that a customer is willing to spend on a product/service The difference between the value that an activity generates and the cost of the activity A network of value creating activities, consists of five primary activities and four supportive activities Business functions that relate directly to the production on products/services Business functions that assist the primary activities and contribute only indirectly to the production, sale, and service of the product. They include procurement, which consists of the processes of finding vendors, setting up contractual arrangements, and negotiating prices. |
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Define Human resource |
Recruiting, compensation, evaluation, and traninig of employees |
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Define linkage |
Interactions across value activities Ex) Manufacturing systems use linkages to reduce inventory costs. Use sales forecasts to plan production, it then uses the production plan to determine raw material needs and then uses the material needs to schedule purchases. The end result- just in time inventory, which reduces inventory costs and sizes. |
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List product implementations List process implementations |
Create a new product or service Enhance products or services Differentiate products and services Lock in customers and buyers: Making it difficult or expensive for customers to switch to another product (Switching costs) Lock in suppliers: Raise barriers to market entry: Make it difficult or expensive for new competition to enter the market Establish alliances: To gain competitive advantage- establish standards, promote product awareness and needs, develop market size, reduce purchasing costs, & provide other benefits. Reduce costs: To enable the organization to reduce prices and increase profitability. |
