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Flashcards in Strategies Deck (14):
1

Revenue Based Strategies

- Take advantage of synergies of other companies
- Raise Prices
- Increase international distribution because $ weak against (no CapEx)
- More business through Online
- Privat Label

2

Cost-Based Strategies

Production
- JIT
- Renegotiate Contracts

Labour
- Cut over-time
- Increase Productivity / incentive systems
- Move to different factories

Finance

Steamlining

3

Growth Strategies

- Existing products to existing customers (Brand loyalty)
- Existing products to new customer (Penetration)
- New product to existing customers
- New products to new customers (product extension?)

4

Pricing Strategies

- Cost Plus Pricing
- Matching
- Value-Based Pricing

For new products:
- Price Penetration
- Price Skimming
- Price Discrimination
- Benefit Pricing (Razor)
- Bundling

5

Entry Strategies

-Build from scratch
-Acquire Existing
-Partner: Joint Venture, Strategic Alliance
-Outsource

-> Quantify investment cost and risk
-> Analyse how the firm has entered markets in the past, whether has it been successful or unsuccessful, and why?

6

Strategy Evaluation: Dell sell through Retail Stores?

- Lower Margins
- Customer Price Discount
- Cross Selling (Sell the cheapest product first)
- Control over inventory cost lost
- Brand perception
- Distance / communication
- Closer to Competitors

=> Which Products? Those with the lowest margin

7

Strategy Evaluation: Direct Selling

- Low inventory cost
- Low Selling & Distribution Cost
- No Salesforce
- Marketing mainly online

8

Strategy Evaluation: Production through Manufacturers

- How will production cost decrease?
- Higher Shipping Cost
- Lower legal protection
- Lower production cost due to efficiency & shared production stages
- HUB America allows "manufactured in US" - but Demand?

9

Ways to Cut Labor Cost

- Cross-Train Workers
- Cut Overtime
- Reduce Employer
- Convert workers into owners (incentive)
- Layoff people
- Institute across-the-board pay decreases

10

Ways to Cut Production Cost

- Invest in IT
- Consolidate production space to gain scale
- Create flexible production lines
- Reduce inventories
- Outsource
- Renegotiate with suppliers
- Consolidate suppliers
- Import parts

11

Ways to Cut Finance Cost

- Have customers pay sooner
- Refinance debt
- Sell non-essential assets
- Hedge currency rates
- Redesign health insurance

12

Strategies to Price Differentiate

-Controlling Availability
-Buyer Characteristics
-Transaction Characteristics
-Product-Line Offering

13

Limitations to Price Differentiation

- Cross-subsidization
- Product launch
- Legal restriction

14

Power of Pricing

Specify how Value Created can be divided between the customers (= incentive to buy) and the firm (covering cost of value-creation activities + provides funds for profit and reinvestment in the firm)

- Fastest and most effective way for maximum profit is to get its pricing right.
- The right price can boost profit faster than other profit levers (11% vs volume 3%)
- Across Industries: Retail 20%, Agriculture 10%
- Across Retail Profit Levers: Price 20%, AVC 15%, Volume, FC 4%