SM_L6 Flashcards
(25 cards)
What are the axes of Porter’s generic strategies matrix?
- Strategic advantage: Low-cost position ↔ Uniqueness perceived by customer
- Strategic target: Industry‑wide ↔ Particular segment (focus)
What is a differentiation strategy?
- Develop products/services with unique attributes valued by customers
- Customers perceive them as better or different than competitors’ offerings
How did Hilti redefine its business model with Fleet Management?
- Sold the hole in the wall rather than the drilling machine
- Shifted from hardware product sales to service (tool‑as‑a‑service)
In Hilti’s Fleet Management, what is the customer value proposition?
- Leasing a comprehensive fleet of tools
- Boosting contractors’ on‑site productivity
Describe the profit formula of Hilti’s Fleet Management.
- Higher margins, asset‑heavy model
- Monthly payments covering tool maintenance, repair & replacement
List key resources & processes underpinning Hilti’s fleet service.
- Strong direct‑sales force
- Contract management capability
- IT systems for inventory & repair
- Warehousing for replacement tools
Why did leasing pose a new challenge for Hilti’s sales representatives?
- Requires consultative selling over weeks or months
- Engagement with CEOs/CFOs instead of site buyers
What new resources were required by Hilti to support leasing?
- Additional specialist personnel
- More robust IT infrastructure
- Expanded warehousing & replacement‑tool stock
What characterises Hardware as a Service?
- Turns discrete product sales into an ongoing service subscription
- Provides just‑the‑tool‑you‑need‑when‑you‑need‑it, eliminating repair/storage hassles
Outline Hilti’s business model evolution.
- Hardware as a Product (1941)
- Hardware as a Service (2001)
- Software as a Service (2015)
What is OnTrack in Hilti’s portfolio?
- Cloud‑based asset management solution
- Tracks any construction asset, not only Hilti tools
Which elements can users manage in OnTrack?
- Assets, assignments & locations
- Proprietary tags (visual ID, barcode, RFID)
- Access via web & mobile app at any time
What is the risk of value migration when products are disintegrated?
- Core product becomes a commodity
- Differentiation shifts to service intelligence/resources
Define Industry Convergence.
- Blurring of industry boundaries that brings together firms that previously did not compete
Approximately what share of S&P 500 firms are affected by convergence?
- At least 50 %
Why might incumbents lose out during industry convergence?
- Investing solely in corporate R&D is insufficient
- Requires strategic repositioning across boundaries
According to contingency theory, which central question must firms ask?
- “What business are we in?”
Per Lawrence & Lorsch, organisational performance depends on what fit?
- Alignment between external environment attributes and internal structure/orientation
Why do traditional strategy tools become inadequate in converging industries?
What do they assume?
- Tools like industry analysis, Five forces, value chain assume static boundaries that no longer hold
Contrast Industry versus Arena thinking.
- Goal: Positional advantage ↔ Capturing territory
- Success metric: Market share ↔ Share of opportunity space
- Threat: Intra‑industry moves ↔ Inter‑industry moves
- Customer definition: Demographic/geographic ↔ Behavioural
- Key driver: Price/quality ↔ Jobs‑to‑be‑done experience
- Acquisition behaviour: Within‑industry ↔ Cross‑industry capabilities
How does profit potential shift along the value chain?
- Moves downstream towards alternative methods & comprehensive solutions (services)
Give an example of a firm moving from product to service.
- Hilti: power tools → Fleet Management Service
What competitive impact does product unbundling have?
- New focus on technological frontier
- Core hardware subject to cost‑based commoditisation
Name the three core components of a business model (Johnson et al., 2008).
- Customer value proposition
- Profit formula
- Key resources & processes
