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Chapter 5 - MGMT 6850

Terms in this set (20)

business level strategy
a strategy designed for a firm or a division of a firm that competes within a single business
Generic Strategies
basic types of business level strategies based on breadth of target market (industrywide versus narrow market segment) and type of competitive advantage (low cost versus uniqueness)
overall cost leadership
a firm's generic strategy based on appeal to the industrywide market using a competitive advantage based on low cost
experience curve
the decline in unit costs of production as cumulative output increases
competitive parity
a firm's achievement of similarity, or being "on par," with competitors with respect to low cost, differentiation, or other strategic product characteristic.
differentiation strategy
a firm's generic strategy based on creating differences in the firm's product or service offering by creating something that is perceived industrywide as unique and valued by customers
focus strategy
a firm's generic strategy based on appeal to a narrow market segment within an industry
combination strategies
firms' integrations of various strategies to provide multiple types of value to customers
mass customization
a firm's ability to manufacture unique products in small quantities at low cost
profit pool
the total profits in an industry at all points along the industry's value chain
Industry Life Cycle
the stages of introduction, growth, maturity, and decline that typically occur over the life of an industry
introduction stage
the first stage of the industry life cycle, characterized by (1) new products that are not known to customers, (2) poorly defined market segments, (3) unspecified product features, (4) low sales growth, (5) rapid technological change, (6) operating losses, and (7) a need for financial support.
growth stage
the second stage of the product life cycle, characterized by (1) strong increases in sales; (2) growing competition; (3) developing brand recognition; and (4) a need for financing complementary value-chain activities such as marketing, sales, customer service, and research and development.
maturity stage
the third stage of the product life cycle, characterized by (1) slowing demand growth, (2) saturated markets, (3) direct competition, (4) price competition, and (5) strategic emphasis on efficient operations.
reverse positioning
a break in the industry tendency to continuously augment products, characteristics of the product life cycle, by offering products with fewer product attributes and lower prices
breakaway positioning
a break in industry tendency to incrementally improve products along specific dimensions, characteristic of the product life cycle, by offering products that are still in the industry but that are perceived by customers as being different
decline stage
the fourth stage of the product life cycle, characterized by (1) falling sales and profits, (2) increasing price competition, and (3) industry consolidation.
harvesting strategy
a strategy of wringing as much profit as possible out of a business in the short to medium term by reducing costs
consolidation strategy
a firm's acquiring or merging with other firms in an industry in order to enhance market power and gain valuable assets
turnaround strategy
a strategy that reverses a firm's decline in performance and returns it to growth and profitability
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