Sevi 3013 Uark Exam 2 with Accurate
Solutions
Porter's Generic Strategies - ANS-cost leadership, differentiation, and focus
overall cost leadership - ANS-a firm's generic strategy based on appeal to the
industrywide market using a competitive advantage based on low cost
Differentiation - ANS-products/services that are unique and valued
focus strategy - ANS-the positioning strategy of using cost leadership or differentiation
to produce a specialized product or service for a limited, specially targeted group of
customers in a particular geographic region or market segment
differentiation strategy forms - ANS-Prestige or brand image
Quality
Technology
Innovation
Features
Customer service
Dealer network
cost-focus strategy - ANS-Creates a cost advantage in its target segment
Exploits differences in cost behavior
differentiation focus - ANS-Differentiates itself in its target market
Exploits the special needs of buyers
Industry Life Cycle - ANS-the stages of introduction, growth, maturity, and decline that
typically occur over the life of an industry
introduction stage - ANS-- Products are unfamiliar to consumers
- Market segments are not well-defined
- Product features are not clearly specified
- Competition tends to be limited
growth stage - ANS-- Characterized by strong increases in sales
- Attractive to potential competitors
- When firms can build brand recognition
maturity stage - ANS-Aggregate industry demand slows
, Market becomes saturated, few new adopters
Direct competition becomes predominant
Marginal competitors begin to exit
decline stage - ANS--Industry sales and profits begin to fall
-Price competition increases
-Industry consolidation occurs
strategies for decline stage - ANS--Maintaining
-Harvesting
-Exiting the market
-Consolidation
diversification strategy must create value for shareholders through - ANS-mergers and
acquisitions
strategic alliances
joint ventures
internal development
Related Businesses - ANS--horizontal relationships
-sharing tangible resources
-sharing intangible resources
Unrelated Businesses - ANS--hierarchical relationships
-value creation derives from corporate office
-leveraging support activities
Economies of scope (related diversification) - ANS-cost savings from leveraging core
competencies or sharing related activities among businesses in a corporation
Related businesses gain market power by: - ANS-pooled negotiating power and vertical
integration
core competencies - ANS-Things a company does extremely well, which sometimes
give it an advantage over its competition
sharing activities - ANS-Sharing tangible & value-creating activities can provide payoffs:
- Cost savings through elimination of jobs, facilities & related expenses, or economies of
scale
- Revenue enhancements through increased differentiation & sales growth
Vertical Integration - ANS-the firm's ownership of its production of needed inputs or of
the channels by which it distributes its outputs
transaction cost perspective - ANS-every market transaction involves some transaction
costs
Solutions
Porter's Generic Strategies - ANS-cost leadership, differentiation, and focus
overall cost leadership - ANS-a firm's generic strategy based on appeal to the
industrywide market using a competitive advantage based on low cost
Differentiation - ANS-products/services that are unique and valued
focus strategy - ANS-the positioning strategy of using cost leadership or differentiation
to produce a specialized product or service for a limited, specially targeted group of
customers in a particular geographic region or market segment
differentiation strategy forms - ANS-Prestige or brand image
Quality
Technology
Innovation
Features
Customer service
Dealer network
cost-focus strategy - ANS-Creates a cost advantage in its target segment
Exploits differences in cost behavior
differentiation focus - ANS-Differentiates itself in its target market
Exploits the special needs of buyers
Industry Life Cycle - ANS-the stages of introduction, growth, maturity, and decline that
typically occur over the life of an industry
introduction stage - ANS-- Products are unfamiliar to consumers
- Market segments are not well-defined
- Product features are not clearly specified
- Competition tends to be limited
growth stage - ANS-- Characterized by strong increases in sales
- Attractive to potential competitors
- When firms can build brand recognition
maturity stage - ANS-Aggregate industry demand slows
, Market becomes saturated, few new adopters
Direct competition becomes predominant
Marginal competitors begin to exit
decline stage - ANS--Industry sales and profits begin to fall
-Price competition increases
-Industry consolidation occurs
strategies for decline stage - ANS--Maintaining
-Harvesting
-Exiting the market
-Consolidation
diversification strategy must create value for shareholders through - ANS-mergers and
acquisitions
strategic alliances
joint ventures
internal development
Related Businesses - ANS--horizontal relationships
-sharing tangible resources
-sharing intangible resources
Unrelated Businesses - ANS--hierarchical relationships
-value creation derives from corporate office
-leveraging support activities
Economies of scope (related diversification) - ANS-cost savings from leveraging core
competencies or sharing related activities among businesses in a corporation
Related businesses gain market power by: - ANS-pooled negotiating power and vertical
integration
core competencies - ANS-Things a company does extremely well, which sometimes
give it an advantage over its competition
sharing activities - ANS-Sharing tangible & value-creating activities can provide payoffs:
- Cost savings through elimination of jobs, facilities & related expenses, or economies of
scale
- Revenue enhancements through increased differentiation & sales growth
Vertical Integration - ANS-the firm's ownership of its production of needed inputs or of
the channels by which it distributes its outputs
transaction cost perspective - ANS-every market transaction involves some transaction
costs
