How many of the efficiencies do you use?
As many as you can!
How many efficiencies are there?
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
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
What is Experience Curve and Learning effects?
The more we do it the better we get
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
What is Just in Time?
Get products when we need it (we dont want products sitting around)
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
What is customer focus?
Making products based on what the customers want
What is cross functional integration?
Having different parts of the value chain work together (ex: walkman from class)
What is Response time?
How fast they can adapt to change
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
What are the generic business level strategies?
- 1. Broad price/cost leadership
- 2. Focused price leadership
- 3. Broad differentiation
- 4. Focused differentiation
What is value creation frontier?
Its difereantiation vs. cost
What are market segments?
Who their targeting as a customer
What is strategic group?
What companies targeting the same type of people
What are rivals?
Based off of strategic group, anyone in your strategic group is a rival
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
What is price signaling "tit-for-tat"?
Match rivals in price to send a message
What is Price leadership?
One company assumes the position in taking the lead to determing pricing strategy to maximize industry profits
What is product proliferation?
Swamping customers options so they accidently choose their product.
What is scope of firm?
Different type of industries in the corporation
What is synergies?
Doing everything that can be done together as one. Share resources, skills, and market power
What are the three benefits?
- 1) Shared resources and skills
What are the costs?
- 1) Loss of competitive pressure
- 2)Bureaucratic costs
What are the 6 generic corporate level strategies?
- 3)Horizontal Mergers
- 4)Vertical Mergers
- 5)Related Diversification
- 6)Unrelated Diversification
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
What is horizontal mergers?
Buying out competitors
What are vertical mergers?
Buying the suppliers or buyers
What is related diversification?
Buying out related companies, its to help the companies operations.
What is unrelated diversification?
Buying out unrelated companies, it is done to boost finances