strat 5

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strat 5
2013-03-03 22:11:19

strat 5
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  1. How do cost leadership strategies create value?
    generate economic value by having lower costs than competitors
  2. How do product differentiation strategies create economic value?
    generates economic value by offering a product that customers prefer over competitors’ product
  3. The intention of a product differentiation?
    • Theintention of a product differentiation strategy is to increase the perceived
    • value of the focal firm’s products and/or services relative to the value of
    • competitor’s products and/or services
  4. True or false. Typically,
    a firms differentiation strategy is likely to rely upon multiple bases of differentiation from multiple BOD categories?
  5. product attributes?
    • base of differentiation, we refer to the preferences created by actual differences
    • in the tangible product or service offered by the focal firm vis-à-vis
    • competitors’ offerings
  6. Product Features?
    the size of a golf club head; baking soda in toothpaste
  7. Product Complexity?
    • weights you can insert into a golf club to correct your swing; multiple functions on a
    • watch – does the feature make it more complicated to use?
  8. Timing of Introduction?
    being the first to market – timing introduction
  9. Location?
    • locating next to a freeway exit for gas stations; mobile mechanics (ability to move
    • location)
  10. firm-customer
    • refer to the customer preferences that are created as the focal firm develops and
    • exploits relationships with customers based on what the focal firm’s target
    • customers want
  11. Customization?
    • Dell computer customers get exactly what they want; West Coast Choppers – Custom
    • motor cycles
  12. Consumer
    creating brand loyalty to a product or service through image advertising
  13. Reputation?
    • a product or service that indicates membership in an elite or socially meaningful
    • group
  14. Linkages
    among Functions in the Firm?
    • ability to effectively integrate multi-functional R&D or innovation teams in the
    • development and transfer of product differentiation ideas
  15. Linkages
    with other Firms?
    • Affiliations with highly reputable firms or causes -a sporting goods store sponsors a
    • benefit race by donating running shoes and receives free radio advertising in
    • return; Mattel toys of Disney movie characters in McDonalds happy meals
  16. Product
    • a furniture store begins to sell home gym equipment, computers, and lawn mowers;
    • grocery stores that have pharmacies and gas stations
  17. Distribution
    Paul Mitchell hair care products only available through salons
  18. Service and Support?
    • an oil change service that offers pick up and delivery of cars to employees of a
    • particular firm parking garage
  19. BOD in Fragmented Industry?
    • product
    • differentiation
  20. BODS in Emerging Industry: ?
    first mover advantages
  21. BOD's in Mature Industry?
    • firms attempt to differentiate established products by
    • “refining” the product—new and improved
    • firms may differentiate a product by offering new levels
    • of service to accompany the product
  22. BOD's in Declining Industry: ?
    • moving toward specialization and/or niches
    • by definition
  23. At the business level, the U-Form?``
    • used to implement product differentiation strategies just as it is to implement cost
    • leadership strategies.
  24. True or false, Decision
    making is usually more decentralized in a product differentiation strategy as
    compared to a cost leadership strategy.?
  25. Can firms effectively pursue both cost
    leadership and product differentiation simultaneously?
    • yes, but it is extremely difficult most companies that pursue both end up being
    • stuck in the middle, they don’t achieve either cost advantages or successfully
    • differentiate their product.