~ ex: Zappos Complements ~ add value to a product or service when they are consumed in tandem Service offerings by focusing on customer service ~ ex: OXO- kitchen utensil company Customer Service ~ can increase the perceived value of their firms' product or ~ Strong R&D capabilities are often needed to create complements Product features ~ Adding unique product attributes allows firms to turnĬommodity products into differentiated products ~ ex: Mont Blanc T/F: A company that uses a differentiation strategy can achieve a competitive advantage as long as its economic value created (V − C) is LOWER than that of its competitor False Although increased value creation is a defining feature of a differentiation strategy, managers must also control _ cost Reason JetBlue could not maintain an initial competitive advantage it was unable to keep its costs down sufficiently Economies of scope the savings that come from producing two (or more) outputs at less cost than producing each output individually, even though using the same resources and technology 3 most salient value drivers that managers have at their disposal 1. ~ ex: BIC company Focused differentiation strategy ~ same as the differentiation strategy except with a narrow f ~ ex: automobile industry Focused cost leadership strategy ~ same as the cost-leadership strategy except with a narrow cost leadership Differentiation Strategy seeks to create higher value for customers than the value that competitors create, while containing costs Cost- Leadership-Strategy seeks to create the same or similar value for customers at a lower cost When considering different business strategies, managers also must define the _ scope of competition Scope of competition ~ the size (narrow or broad) of the market in which a firm chooses to compete
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