STGY Chapter 5 Flashcards
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, characteristic of the product life cycle, by offering products with fewer product attributes and lower prices.
breakaway positioning
a break in the 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 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 pricecompetition, and (3) industry consolidation.
