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The flashcards below were created by user
daisykuk91
on FreezingBlue Flashcards.
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4 Generic factors build competitive advantage
- better differentiate products
- efficient in reducing costs
- 1. Efficiency
- 2. Quality
- 3. Innovation
- 4. Customer Responsiveness
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Efficiency
- measured by cost of inputs required to produce a given output
- the more efficient, the lower the cost of inputs (low -cost competitive advantage)
- utilizing inputs in most productive way
- high employee & capital productivity = low cost of production
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Quality
- high quality products create brand-name reputation
- >allow charge a higher price
- Higher product quality result greater efficiency
- >less employee time fixing defective products
- >higher employee productivity
- >lower unit costs
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Innovation
- Process innovation if new about operation
- Product innovation if new about product
- Innovation include advances in
- >kind of product
- >production process
- >mgt system
- >organizational structure
- >strategies developed
- Successful innovation give sth unique
- >allows to differentiate & charge premium price
- >allows to reduce unit costs
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Customer Responsiveness
- give customer exactly what they want when they want
- identify & satisfy customer needs
- improve efficiency of production process and quality of product
- develop new product have new features
- customize goods to unique demand
- reduce customer response time/ order lead time
- >can charge a higher price
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