Chapter 5 Notes

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Published on 30 Dec 2011
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Document Summary

Types of strategies finding a position that works y y. Drivers y y y y y economies of scale learning economies of scope superior technology superior product design. Threats y y y new technology inferior quality social, political, and economic risk of outsourcing. Alliances to secure missing inputs or distribution access. Low-cost leaders emerge through experience and scale advantages. Focusing on segments that provide the most profitability. Divestitures enable some competitors to exit and others to consolidate larger shares of the market. Fewer competitors result in less pressure for differentiation, but declining sales results in greater pressure for cost savings. Integrated positions require choice of focusing first on cost or differentiation. Choices of international markets and new industry diversification need rational sequencing. Timing of exit from selected segments or businesses. Costs are high; focus is on securing additional capital to fund growth phase. Margins can improve rapidly because of experience and scale.

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