Man 4720 Midterm P2

Front 1

Low-cost producers typically sell

Back 1

a standard, no frills, product and place considerable emphasis on reaping scale or absolute cost advantages from all sources

Front 2

If a firm can achieve and sustain overall cost leadership

Back 2

it will be an above-average performer in its industry provided it can command prices at or near the industry average

Front 3

A cost leader must achieve

Back 3

parity or proximity in the basis of differentiation relative to its competitors to be an above-average performer, even though it relies on cost leadership for its competitive advantage

Front 4

Differentiation strategy

Back 4

a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers; it selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs; premium price

Front 5

Focus

Back 5

rests on the choice of a narrow competitive scope within an industry; selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others

Front 6

Focus strategy variants

Back 6

cost focus; differentiation focus

Front 7

Cost focus

Back 7

a firm seeks a cost advantage in its target segment; exploits differences in cost behavior

Front 8

Differentiation focus

Back 8

a firm seeks differentiation in its target segment; exploits the special needs of buyers in certain segments

Front 9

Stuck in the middle

Back 9

a firm that engages in each generic strategy but fails to achieve any of them

Front 10

There are three conditions under which a firm can simultaneously achieve both cost leadership and differentiation

Back 10

competitors are stuck in the middle; cost is strongly affected by share in interrelationships; affirm pioneers a major innovation

Front 11

Competitive advantage cannot be understood by looking at a firm as a whole

Back 11

it stems from many discrete activities a firm performs in designing, producing, marketing, delivering, and supporting its product

Front 12

Differentiation can stem from

Back 12

similarly diverse factors including the procurement of high quality raw materials, a responsive order entry system or a superior product design

Front 13

A firm's value chain is

Back 13

embedded in a larger steam of activities that I term the value system

Front 14

Suppliers have value chains (upstream value)

Back 14

that create and deliver the purchased inputs in a firm's chain

Front 15

Value

Back 15

is measured by total revenue, a reflection of the price a firm's product commands and the units it can sell

Front 16

Value activities can be divided into two broad types

Back 16

primary activities and support activities

Front 17

Primary activities

Back 17

the physical things created

Front 18

Support activities

Back 18

are the nonphysical things like human resources and technology

Front 19

Identifying value activities requires

Back 19

the isolation of activities that are technologically and strategically distinct.

Front 20

Operations

Back 20

activities associated with transforming inputs into the final product form such as machining; packaging assembly and equipment maintenance

Front 21

Outbound logistics

Back 21

activities associated with collecting, storing, and physically distributing the product to buyers, such as finished goods warehousing, materials handling, etc

Front 22

Marketing and sales

Back 22

Activities associated with providing a means by which buyers can purchase the product and inducing them to do so

Front 23

Service

Back 23

activities associated with providing service to enhance or maintain the value of the product

Front 24

Procurement

Back 24

the function of purchasing inputs used in the firm's value chain not to the purchased inputs themselves

Front 25

Technology development

Back 25

every value activity embodies technology be it know how, procedures or technology embodied in process equipment

Front 26

Firm infrastructure

Back 26

consists of a number of activities including general management, planning, finance, accounting, legal, government affairs, and quality management

Front 27

Linkages

Back 27

are relationships between the way one value activity is performed and the cost or performance of another

Front 28

Linkages can lead to competitive advantage in two ways

Back 28

optimizing and coordination

Front 29

Channel linkages are similar to supplier linkages

Back 29

channel has value chains through which a firm's product passes

Front 30

Segment scope

Back 30

the product varieties produced and buyers served

Front 31

Vertical scope

Back 31

the extent to which activities are performed in house instead of by independent firms.

Front 32

Geographic scope

Back 32

the range of regions, countries, or groups of countries in which a firm competes with a coordinated strategy

Front 33

Industry scope

Back 33

the range of related industries in which the firm competes with a coordinated strategy

Front 34

Broad scope can allow

Back 34

a firm to exploit the benefits of performing more activities internally

Front 35

Narrow scope can allow

Back 35

the tailoring of the chain to serve a particular target segment, geographic area or industry to achieve lower cost or to serve the target in a unique way

Front 36

Coalitions

Back 36

are long term agreements among firms that go beyond normal market transactions but fall short of outright mergers

Front 37

The value chain provides

Back 37

a systematic way to divide a firm into its discrete activities and thus can be used to examine how activities in a firm are and could be grouped

Front 38

Why do companies exist

Back 38

they create value for their customers, and customers are unable to replicate those value propositions on their own