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Management > Chapter 5 - Competitive strategies > Flashcards

Chapter 5 - Competitive strategies Flashcards

1
Q

SWOT Analysis purpose

A

internal analysis = Strengths + weakness
external analysis = Opportunities + Threats
=> strategy

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2
Q

SWOT Analysis

A

-Identify company’s resource strength + competitive capabilities
-Identify company’s resource weakness + competitive deficiencies
- Identify company’s market opportunities
-Identify external threats to company’s future well-being
=> conclusions concerning the overall business situation
(attractiveness of the company + where are the (un)attractive parts))
==>Implications for improving company strategy

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3
Q

strategy inferences from SWOT Analysis

A

=> look for combinations that point towards different alternatives

  • S+O Strategy
  • S+T Strategy
  • W+O Strategy
  • W+T Strategy
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4
Q

S+O Strategy

A

How do I use these STRENGTHS to take advantage of these OPPORTUNITIES?

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5
Q

S+T Strategy

A

How do I use my STRENGTHS to reduce the likelihood + impact of these THREATS?

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6
Q

W+O Strategy

A

How do I overcome my WEAKNESSES that prevent me taking advantages of these OPPORTUNITIES?

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7
Q

W+T Strategy

A

How do I address the WEAKNESSES that will make these THREATS reality?

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8
Q

sustaining competitive advantage

A

isolation mechanism to prevent imitation

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9
Q

Types of isolation mechanism

A
  • obscure superior performance
  • deterrence (agressive signals to imitators)
  • Preemption (exploit all available investment opportunities)
  • casual ambiguity
  • base competitive advantage on immobile/ costly to replicate resources
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10
Q

competitive strategies

A
  • cost advantage
  • differentiation advantage
  • niche strategy
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11
Q

cost advantage strategy

A

same price but lower costs = higher profit

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12
Q

cost advantage strategy requirements

A
  • cost control
  • product/ service standardisation
  • economies of scale/ Scope
  • learning effects
  • outsourcing/ vertical integration
  • bargaining power
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13
Q

cost advantage strategy risks

A
  • catch-up of competitors
  • cost-price dynamics (hyper-competition)
  • changes in costumer behaviour
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14
Q

cost leadership + experience curve

A
  • empirical estimate: where do unit costs fall - volume of production increases
    => firms which manage to establish first in market -> realize cost advantages through higher market shares + accelerated learning
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15
Q

cost leadership + Economies of scale

A

=> positive relation between market share + cost level

  • usually at capital intensive operations
  • source: invisibility + spreading of fixed costs = decreasing costs per unit
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16
Q

cost leadership + Economies of scope

A

=> positive relation between product portfolio + cost level
(average cost of product lowered by joint production with other products)
! depend on increased variety not higher volume of production!

17
Q

Economies of scope sources

A
  • use of one/ more common resources in production of several outputs
    -spreading fixed costs over more products
  • application of knowledge + core capabilities to production of several outputs
    => applying knowledge + core competencies to a broader scope of products without using up the relevant knowledge/ competence
18
Q

Drivers of cost advantage

A
  • economies of scale
  • economies of learning
  • production techniques
  • product design
  • input costs
  • capacity utilization
  • residual efficiency
19
Q

using the value chain to analyze costs

A
  1. identify activities
  2. allocate total costs
  3. identify cost drivers
  4. identify linkages
  5. identify opportunities for cost reduction
20
Q

Differentiation strategy

A

same cost but higher price bc of the differentiation

21
Q

Differentiation strategy requirements

A
  • brand name/ reputation / image
  • superior product quality
  • first mover advantage
  • strong service + process skills
  • design/ marketing skills
  • ability to attract creative employees
22
Q

Differentiation strategy risks

A
  • overspending erodes profitability
  • inadequate price premiums
  • imitation by the competiors
23
Q

Differentiation strategy - delivering value via broad differentation

A
  1. lower buyer’s overall cost of using the product
  2. incorporate tangible features -> increase costumer satisfaction (eg. design features)
  3. incorporate intangible features -> increase buyers satisfaction (eg. status)
  4. signal the value of the product (justify costumers minds)
    => using the value chain to analyze costs/ skills
24
Q

Focus (Niche) Strategy

A

focusses on a narrow costumer segment

  • satisfy needs of a specific costumer segment better than any other
  • may be defined by geographic uniqueness, specialized requirements in product uniqueness or special products attributes
25
Q

Focus (Niche) Strategy requirements

A 
- protect niche through entry barriers like
> patents/ technology
> costumer loyalty
> unique service
> unique bundling
26
Q

Focus (Niche) Strategy - two types

A
  • focused low cost strategy: lower costs than rivals in serving a well defined buyer segment
  • focused differentiation strategy: offer a product appealing to unique preferences of a well-defined buyer segement
27
Q

Focus (Niche) Strategy risks

A
  • niche becomes unattractive
  • niche becomes attractive to competitors
  • new-player re-segment the market
  • the strategy is limited in duration
28
Q

niche strategy types

A
  • regional
  • target groups
  • product/service
  • branding
  • high speed
  • innovation
  • cooperation
  • market splitting
29
Q

cost leadership chose when

A
  • products of rivals are identical
  • difficult to achieve differentiation
  • buyers use product in the same way
    -switching cost low
    Avoid: relying on easily replicable cost reduction approaches + becoming obsessed with cost cutting
30
Q

product differentiation choose when

A
  • few rivals would be able to follow
  • possible to achieve differentiation
  • buyers needs diverse
  • technological change pace high, buyers interested
  • Avoid: relying on easily replicable differentiation + investing in improvements with no costumer value
31
Q

focused (niched) strategy choose when

A

big niche to which competitors show low interest due to its costly + specialized needs

32
Q

best cost provider strategy choose when

A
  • product differentiation a norm + large number of value conscious costumers
  • competitive space for price/ performance optimal product (eg. high quality - medium price)
    Avoid: Stucking in the middle

Management (11 decks)

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