session 4 -ash Flashcards
(18 cards)
What is the primary objective of a Blue Ocean Strategy?
A. To outperform rivals in existing markets
B. To increase market share through price cuts
C. To create and capture new demand in the uncontested market space
D. To reduce cost through outsourcing
C
Which of the following is NOT one of the four actions in the Blue Ocean Strategy framework?
A. Eliminate
B. Reduce
C. Accelerate
D. Create
C
Which of the following is NOT a main cost driver in a cost-leadership strategy?
A. Cost of input factors
B. Brand differentiation
C. Economies of scale
D. Learning-curve effects
B
Which business-level strategy is best suited to protect against buyer power in Porter’s Five Forces model?
A. Cost leadership
B. Product expansion
C. Geographic diversification
D. Focus strategy
A
What does a strategy canvas help visualize?
A. A company’s SWOT analysis
B. Financial ratios across quarters
C. The relative performance of value drivers across competitors
D. Porter’s Five Forces in an industry
C
Which of the following best describes a Red Ocean market?
A. An untapped market space with no competition
B. A market where firms compete by creating new demand
C. A known market space with intense competition
D. A market dominated by monopolies
C
What is the goal of a cost-leadership strategy?
To reduce a firm’s cost below that of competitors while offering acceptable value, thus achieving competitive advantage.
What are the four main cost drivers in a cost-leadership strategy?
Cost of input factors
Economies of scale
Learning-curve effects
Experience-curve effects.
How do business-level strategies interact with the five forces?
Differentiation builds customer loyalty and reduces threats from substitutes;
Cost leadership increases entry barriers and reduces buyer/supplier power.
What is a Blue Ocean Strategy?
A strategy that combines differentiation and cost leadership to unlock new market space and create a leap in value for both the firm and customers.
What are the four actions in the Blue Ocean Strategy framework?
Eliminate:
This action involves identifying and eliminating factors that the industry takes for granted, and which no longer have value for buyers.
Reduce:
This action focuses on reducing factors that the industry over-emphasizes, as they may not be essential for a new value proposition.
Raise:
This action involves raising factors that are already important, but not sufficiently valued by the industry.
Create:
This action focuses on creating entirely new factors that have not been offered by the industry before, and that will appeal to a new set of buyers.
What are the key risks of a Blue Ocean Strategy?
Failing to achieve value innovation, becoming “stuck in the middle,” or quickly being imitated by competitors.
What is strategic commitment and how does it affect industry rivalry?
Strategic commitment in business refers to decisions with long-term implications that are difficult to reverse, impacting how competitors behave.
If companies have high strategic commitments, they have more “skin in the game” and cannot back down. They must stay in the industry.
What are the 4 types of innovation?
1. Incremental innovation (Existing Market, Existing Tech) - Small, continuous improvements
2. Radical innovation (New Market, New Tech) - breakthroughs creating new markets (eg. invention of airplanes)
3. Architectural innovation (New Market, Existing Tech) - reconfiguring existing technologies for new uses
4. Disruptive innovation (Existing Market, New Tech) - targeting overlooked segments with initially lower performance but eventually surpassing incumbents ( eg. netflix replacing cable tv )
How do you successfully achieve value innovation?
- Lower costs
- Eliminate: which of the factors should be eliminated?
- Reduce: which of the factors should be reduced? - Increase perceived consumer benefits
- Raise: which of the factors should be raised?
- Create: which factors should be created?
Note: it is difficult to succeed at value innovation.
What is the innovation process? 4 I’s
- Idea
- abstract concepts or research findings - Invention
- Transformation of an idea into a product
- The modification and recombination of products - Innovation
- Commercialisation of an
invention - Imitation
- Copying a successful innovation
What is a platform business? and it’s advantages
- Enables interaction between producers and consumers
- Its overarching purpose is to enable matches among users
- Provides infrastructure and sets governance conditions
Advantages:
- They scale more efficiently than pipelines by eliminating gatekeepers.
- They unlock new sources of value creation and supply
- They benefit from community feedback
What is a pipeline business?
- Linear transformation through the value chain
- Research and development then design before manufacturing and selling
