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How many of the efficiencies do you use?
As many as you can!
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How many efficiencies are there?
eight
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What are the efficiencies?
- 1. Economies of Scale and Scope
- 2. Experience curve and learning effects
- 3. Flexible production & mass customization
- 4. Just in Time
- 5. TQM/ Reliability
- 6. Customer Focus
- 7. Cross-functional Intergration
- 8. Response Times
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What is Economies of Scale and Scope?
- Scale: Selling more of the product to spread out fixed costs
- Scope: Selling different products to spread out fixed costs
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What is Experience Curve and Learning effects?
The more we do it the better we get
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What is Flexible Production and Mass Cutomization?
- Flexible Production: Manufacturing that is able to adapt to changes
- Mass customization: Have a list of different ways you can have a product
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What is Just in Time?
Get products when we need it (we dont want products sitting around)
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What is TQM/ reliability?
- TQM: Making sure that every part of the production process was doing their job the right way and not making mistakes (minimize defective products)
- Reliability: Making products that are reliable
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What is customer focus?
Making products based on what the customers want
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What is cross functional integration?
Having different parts of the value chain work together (ex: walkman from class)
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What is Response time?
How fast they can adapt to change
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What are the different parts of Business level strategy?
- 1. Define the industry
- 2. Valuie creation Frontier
- 3. Generic business level strategy
- 4. Market Segments, Strategic Groups, and rivals
- 5. Tactics for managing rivals
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What are the generic business level strategies?
- 1. Broad price/cost leadership
- 2. Focused price leadership
- 3. Broad differentiation
- 4. Focused differentiation
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What is value creation frontier?
Its difereantiation vs. cost
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What are market segments?
Who their targeting as a customer
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What is strategic group?
What companies targeting the same type of people
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What are rivals?
Based off of strategic group, anyone in your strategic group is a rival
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What are the different tactics for managing rivals?
- 1. Price signaling
- 2. Price leadership
- 3. Non-price competition
- 4. Market Penetration
- 5. Capacity control
- 6. Product Proliferation
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What is price signaling "tit-for-tat"?
Match rivals in price to send a message
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What is Price leadership?
One company assumes the position in taking the lead to determing pricing strategy to maximize industry profits
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What is product proliferation?
Swamping customers options so they accidently choose their product.
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What is scope of firm?
Different type of industries in the corporation
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What is synergies?
Doing everything that can be done together as one. Share resources, skills, and market power
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What are the three benefits?
- 1) Shared resources and skills
- 2)Synergies
- 3)Control
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What are the costs?
- 1) Loss of competitive pressure
- 2)Bureaucratic costs
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What are the 6 generic corporate level strategies?
- 1)Outsourcing
- 2)Alliances
- 3)Horizontal Mergers
- 4)Vertical Mergers
- 5)Related Diversification
- 6)Unrelated Diversification
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OUTSOURCING:disadvantages?
What is hostage taking and credible commitments?
- Flexible: Not stable; costs will raise
- Hostage taking: Take part of a company so they dont fault on contract
- Credible Comitments: try to get both companies more commited
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What is horizontal mergers?
Buying out competitors
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What are vertical mergers?
Buying the suppliers or buyers
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What is related diversification?
Buying out related companies, its to help the companies operations.
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What is unrelated diversification?
Buying out unrelated companies, it is done to boost finances
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