Strategic Management - Chapter 4 and 5
Strategic Management - Chapter 4 and 5 BUAD 4890
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This 2 page Class Notes was uploaded by Anna Notetaker on Friday September 16, 2016. The Class Notes belongs to BUAD 4890 at Middle Tennessee State University taught by Richard Mpoyi in Fall 2016. Since its upload, it has received 11 views. For similar materials see Strategic Management in BUAD at Middle Tennessee State University.
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Date Created: 09/16/16
Strategic Management Week 4 1. Focus Low Cost – carved out a group to pursue. Example: Sam’s Choice -> targets families and businesses. Broad Low cost – all and many varieties. Example: Walmart -> all types of individuals. Focus Differentiation – add value and set self apart. Broad Differentiation 2. Low Cost: (+) Perform a value chain activity more efficiently (+) eliminate a step in the value chain (-) too fixated on cost, ignores market shifts (-) cut too much 3. Differentiation: (+) features that reduce the buy the buyer’s cost of using (pruis) (+) tangible features (+) intangible features (+) signal the value (-) differentiate in ways easy to copy (-) differentiators have an external focus and can lose sight of costs (-) adds bell and whistles that does not drive sales 4. Integrated: (+) complete on price or quality (one constant) (-) difficult to sustain (-) stuck in the middle Chapter 5: 1. Production: Economies of Scales: reductions in unit cost attributed to larger outputs. Economies of Scope: fixed set of assets that has broaden the scope of business. Cost Advantage that results when firms provide a variety of products rather than specializing in just one. Learning Curve Effects: cost savings that come from learning by doing. Experience Curve Effects: cost savings that naturally occur over time. Life cycle of Products. 2. Marketing: Customer Defection Rate: % of customers that goes to a competitor. Customer Acquistion Cost: how much does it cost to get a brand new customer to buy a product or service. 3. Supply Chain: Supply Chain Management: managing flows of inputs to the production process in order to minimize inventory holding cost and maximize inventory turnover. Pay For Performance: good pay will increase work ethics – works only up to a certain point in a company. Six Sigma Quality Control: reducing waste and defective products to almost zero.
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