MGMT 498 Chapter 4 and 5 Quiz

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John Pepper's Class Study Flashcards for Chapter 4 and 5

Created Mar 9, 2009
by rochie7314

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	Side A	Side B
1	Two large categories of strategic choices:	Business-level strategies Corporate-level strategies
2	Business-level Strategies	actions firms take to gain competitive advantages in a single market or industry
3	Corporate-level Strategies	Actions firms take to gain competitive advantages by operating in multiple markets or industries...
4	Two Business-Level Strategies are AKA and they are:	Generic Business Strategies: Cost Leadership Product Differentiation
5	Cost Leadership Business Strategy	Focuses on gaining advantages by reducing its costs to below those of all its competitors
6	Product Attributes Usually Emphasized by Cost Leadership Strategies	Reliability Low Prices
7	Important sources of Cost Advantages for Firms 1-3	1. Size differences and Econ/Disecon of Scale 2. Experience differences +learning-curve econ 3.Differential...
8	Important Sources of Cost Advantages for Firms 4-5	4. Technological advantages independent of scale 5. Policy Changes
9	Size Differences and Economies of Scale	Exist when the increase in firm size is associated with lower costs
10	Reasons that increasing the volume of production can reduce a firm's costs	1. Volume of Production and Specialized Machines 2. V. of Production and the cost of plant...
11	Size Differences and Diseconomies of Scale	Can actually increase costs if firms grow too large.
12	Important Sources of Diseconomies of Scale	Physical limits to efficient size, managerial diseconomies, worker de-motivation, distance...
13	Experience Differences and Learning-Curve Economies	Depends on their cumulative levels of production, the one with the greatest experience in manufacturing...
14	Learning Curve and...	LC. and Economies of Scale LC. and Cost Advantages LC. and Competitive Advantage.
15	1st Difference between Economies of Scale and Learning Curves	Economies of Scale focuses on the relationship between the volume of production at a given...
16	2nd Difference Between Economies of Scale and Learning Curves	Economies of Scale will reach diseconomies of scale while there is no increase in costs in...
17	Two Criticisms of Learning Curve	1. Acquisition of share itself is expensive 2. There is no room for any other bus/cor. strategies,...
18	Differential Low-Cost Access to Productive Inputs	Productive Inputs are any supplies used by a firm in conducting its business activities; labor,...
19	Technological Advantages Independent of Scale	Technological advances can substantially reduce the cost
20	Policy Choices	Firms can make choices about the kinds of products and services they will sell which will have...
21	Likely-to-be-rare-sources of cost advantages	leaving-curve economies of scale, differential low-cost access to productive inputs, technological...
22	Less-likely to be rare sources of cost advantages	Economies of Scale, Diseconomies of Scale, technological hardware, policy choices
23	Escalation of Commitment	Commited to an incorrect course of cation increase their commiment to this action as its limitations...
24	Low-Cost Duplication Possible	Economies of Scale, Diseconomies of Scale
25	May be costly to Duplicate	Learning-curve economies, technological "hardware", policy choices
26	Usually costly to duplicate	Differential low-cost access to productive inputs, technological inputs
27	Organization Structure: Functional Structure With CL	Few layers in the reporting structure, simple reporting relationships, small corporate staff,...
28	Management Control Systems for CL	Tight cost control systems, quantitative cost goals, close supervision of labor-raw materials-inventory,cost...
29	Compensation Policies for CL	Reward for cost reduction Incentives for all employees to be involved in cost reduction
30	U-form structure	Unitary, only one person in the organization who has a broad, multifunctional corporate perspective
31	Responsibilities of the CEO in a Functional Organization	1. To formulate the strategy of the firm 2. To coordinate the activities of the functional...
32	International Operations can reduce a Firm's costs in at least 3 ways	1. By increasing sales to realize economies of scale 2. by gaining access to low-cost labor,...
33	Product Differentiation	strategy whereby firms attempt to gain a CA by increasing the perceived value of their products...
34	The Existence of Product Differentiation is always a matter of:	Customer Perception
35	Differentiation by focusing on the attributes of a firm's products or services	1. product features 2. product complexity 3. timing of product introduction 4. location
36	Differentiation based on relationships between a firm and its customers	1. product customization 2. Consumer Marketing 3. Reputation
37	Differentiation by focusing on links within and between firms	1. Linkages between functions2. Links with other firms 3. Product Mix 4. Distribution Channels...
38	Architectural Competence	the ability to use organizational structure to facilitate coordination among scientific disciplines...
39	A mix of products or services can be a source of product differentiation especially when:	1. those products or services are technologically linked 2. when a single set of customers...
40	Hedonic Prices	it is the part of the price of a product or service that is attributable to a partic. characteristic...
41	The Rarity of Product Differentiated Firms depends on:	The ability of individual firms to be creative in finding new ways to differentiate their products
42	Low Cost Duplication Usually Possible for PD	Product Features
43	May be costly to duplicate for PD	Product Mix, links with other firms, product customization, product complexity, and consumer...
44	Usually costly to Duplicate for PD	links between functions, timing, location, reputation, distribution channels, service and support
45	Substitutes for Product Differentiation??	Many of the bases for product differentiation can be partial substitutes, and other strategies...
46	Matrix Structure	When individuals have two or more bosses simultaneously
47	Organizational Structure and Implementing Product Differentiation	1. Cross-divisional/ functional product development teams. 2. Complex matrix structures 3.Skunk...
48	Management Control Systems and Implementing Product Differentiation	1. Broad decision-making guidelines 2. Managerial freedom within guidelines 3. Policy of Experimentation
49	Policy of Experimentation	Such a policy exists when firms are committed to engaging in several related product differentiation...
50	Compensation Policies and Implementing Product Differentiation Strategies	1. Rewards for risk taking, nor punishment for failures 2. Rewards for creative flair 3. Multidimensional...
51	Transnational Strategy	Exploits all the advantages of both international integration and local responsiveness.
52	Maquiladoras	manufacturing plants owned by non-mexican companies that operate in Mexico near the U.S. border...
53	CEOs who fail to involve functional managers in strategy formulation run several risks:	1. strategic choices made in isolation may be made without complete info. 2. Limiting involvement...
54	Price Takers	the price of the products or services they sell is determined by market conditions and not...
55	Technological Software	The quality of relations between labor and management, an organizations culture, and the quality...
56	Any company seeking to gain a cost advantage must start with:	A good product
57	The equation that determines fundamentally a company's ability to be a superior performer: What...	The comparison of a company's prices relative to its competitors and its cost position relative...
58	Soap was a fascinating example of industry positioning: Ivory first provided what strategy?	First differentiation and then cost-leadership
59	What does the Ivory Case show us?	That the successful strategies are the ones that are consistently implemented over long periods...
60	When must strategy change?	When industry structure or competitive positions change significantly
61	When thinking in terms of differentiation strategy one must think in terms of two questions:	1. What are the fundamental principles of competing with a Differentiation strategy?2.How is...
62	Successful differentiators make a point to:	let the customer know the difference that should automatically be perceived and finds areas...
63	To sustain your differentiation:	You must be a moving target
64	Product Differentiation is all about:	Creating value and communicating that value to your target customer
65	Relative Perceived Superiority:	To ensure your success, if you have done this, you have properly differentiated.
66	When you adopt a differentiation strategy:	You are also committing to a strategy of consistent improvement
67	In your business life, you have two kinds of strategic decisions to make:	Where you are going to compete, and how you are going to gain a competitive advantage