MGMT 101 Chapter Notes - Chapter N/A: Mass Customization, Cost Leadership, Customer Switching
Document Summary
Michael porter"s framework of generic strategies: overall cost leadership, differentiation, and focus. Factors that determine the sustainability of competitive advantages. How competitive strategies should be revised when the industry shifts. Industry life cycle: introduction, growth, maturity, decline (cid:1) (cid:1) Overall cost leadership: creating a low-cost-position: firm must manage relationships throughout the value chain and lower costs throughout the entire chain. Differentiation: create products/services that are unique and values: focus on non-price attributes for which customers will pay a premium. Focus: directed attention toward narrow product lines, buyer segments, or targeted geographic markets: must then gain advantage through either differentiation or cost leadership (cid:1) Overall tactics: efficient-scale facilities, cost reductions, tight cost and overhead control, avoidance of marginal customer accounts, cost minimization. Experience curve how a business learns to lower costs as it gains experience with production processes: with experience, unit costs of production decline, output increases.
