Strategic Management Ch. 6

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  1. Determines a firm's strategic position in its quest for competitive advantage when competing in a single industry or product market
    Business-level strategy
  2. What are the distinct strategic positions
    Differentiation and cost leadership
  3. What is the goal of a differentiation strategy
    To increase the perceived value of goods and services so that customers will pay a high price for additional features
  4. Unique value drivers managers can manipulate
    • Product features
    • Customer service
    • Customization
    • Complements
  5. Value drivers contribute to competitive advantage only if
    their increase in value creation exceeds the increase in costs
  6. Focus of competition in a differentiation strategy
    Value-enhancing attributes and features, while controlling costs
  7. Goal of cost leadership strategy
    reduce the firm's cost below that of its competitors
  8. Focus of compettition in cost leadership strategy
    Acheving the lowers possible cost postion which allows the firm to offer the lowest price while maintaining acceptable value
  9. Unique cost drivers that managers can manipulate
    • Cost of input factors
    • Economies of scale
    • Learning- and experience- curve effects
  10. Helps managers use generic business strategies to protect themselves against the industry forces that drive down profitability
    Five forces model
  11. A successful ntegration strategy requires
    That trade-offs between differentiation and low cost be reconciled
  12. Why is the integration strategy often difficult
    The two distinct strategic positions require internal value chain activities that are fundamentally different from one another
  13. When firms fail to resolve strategic trade-offs between differentiation and cost
    They end up being "Stuck in the middle"They succeeed at neither strategy leading to competitive disadvantage
  14. Reaching the productivity frontier enhances the likelihood of
    Obtaining a competitive advantage
  15. an organization to balance and harness different activities in trade-off situations
    Ambidextrous organization
  16. Increases ni cost per unit when output increases
    diseconomies of scale
  17. Decreases in cost per unit as output increases
    Economies of scale
  18. Output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest cost position that is achievable through economies of scale
    Minimum efficient scale (MES)
  19. Relationship that captures the result of performing best practices at any given time; the function is concave to capture the trade-off between value creation and product cost
Card Set:
Strategic Management Ch. 6
2017-02-21 19:09:28

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