MGSC01H3 Chapter 5: Chapter 5 Notes

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lavenderdonkey6

30 Dec 2011

School

UTSC

Department

Management (MGS)

Course

MGSC01H3

Professor

Professor Constantinou

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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.

Related Questions

Checking the competitive advantage potential of cross-business strategic fit involves:

A) evaluating a diversified company's profitability relative to competitors.

B) examining a company's costs relative to the costs of its chief rivals in the industry.

C) determining if there are opportunities to exploit outsourcing opportunities by a diversified company's lineup of businesses.

D) considering what competitive value can be generated from a strategic fit.

E) evaluating how much benefit a diversified company can gain from cross-business value chain matchups and resource sharing.

taupegerbil434

A competitive strategy of striving to be the low-cost provider is particularly attractive when:

A) buyers are not price sensitive.

B) the industry is made up of a large number or equal-sized rivals.

C) there are many ways to achieve product differentiation that have value to buyers.

D) price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers.

E) switching costs are high, price competition is strong, and buyers tend to use the industry's products in many different ways.