MGMT 3202 Week 7 Notes
MGMT 3202 Week 7 Notes MGMT 3202
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This 2 page Class Notes was uploaded by an elite notetaker on Tuesday February 23, 2016. The Class Notes belongs to MGMT 3202 at East Carolina University taught by Tiffany Woodward in Spring 2016. Since its upload, it has received 28 views. For similar materials see Fundamentals of Management in Business at East Carolina University.
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Date Created: 02/23/16
2/22-2/26 Chapter 6 In addition to the PowerPoint she posted on blackboard The Five Forces Model • When substitutes exist, your customers can easily switch. If they can switch, you cant command high prices for your products Functional-Level Plan & Strategy • Functional-level plans are typically consistent with higher level plans • One organization may have a strategy to keep costs low • The strategy of the manufacturing function/department might be to reduce production costs by 15% over the next year Concentration in a Single Industry • Putting all of your eggs in one basket • Simplest corporate level strategy • Provides no cushion if the industry experiences a slump Vertical Integration • Allows a company to reduce costs and/or distinguish itself from the competition • Backward Vertical Integration: an ice cream company buying the dairy farm or opening their own • Forward Vertical Integration: moving into distribution. Apple is in total control and offers expert help to change the customer experience which sets them apart from competitors Global Strategy • Inexpensive, but may result in lower market share • Example: name brands (Rolex watches) and electronics Multi-domestic Strategy • More expensive, but typically results in greater market share • Example: restaurants/fast food (McDonalds) and cars (Toyota) Exporting • Wineries in France export products to North America Importing • Pier 1 imports goods from around the world • Minimal involvement, risk, investment Licensing • DuPont allows a factory in another country to produce Teflon Franchising • Hilton sells a franchise to a company in another country to operate under their name • Moderate involvement, risk, investment Strategic Alliance • Starbucks located in many stores Join Venture • Created BPW to sell ready-to-drink products • Moderately high involvement, risk, investment Wholly Owned Foreign Subsidiary • VW of America is a subsidiary of VW group in Germany • High involvement, risk, investment Low-cost Strategy • Cost savings are then typically passed on to customers • Example: Wal-Mart buys in bulk and pays lower wages Differentiation • A differentiation strategy is typically more expensive to pursue • Example: coke/Pepsi attempts to distinguish their soda from others and engage in marketing that informs customers regarding their differences “Stuck in the Middle” • K-Mart would up in the middle after Wal-Mart won the price war and the company failed to distinguish itself. • Example: Toyota and Honda have been successful being “stuck in the middle” Focused Low-Cost • Segments can be defined by demographics (age, gender, income level) or by the channel used to reach the customer • Example: Claire’s has inexpensive jewelry and accessories and targets segment demographic (preteen/teenage girls) Focused Differentiation • Segments can be defined by demographics or by the channel used to reach the customer. • Example: Ferrari has high quality, customized, hand made automobiles with a target segment of rich people
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