MGMT 498 Chapter 4 and 5 Quiz

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

67 cards   |   Total Attempts: 183
  

Cards In This Set

Front Back
Two large categories of strategic choices:
Business-level strategies Corporate-level strategies
Business-level Strategies
Actions firms take to gain competitive advantages in a single market or industry
Corporate-level Strategies
Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously
Two Business-Level Strategies are AKA and they are:
Generic Business Strategies: Cost Leadership Product Differentiation
Cost Leadership Business Strategy
Focuses on gaining advantages by reducing its costs to below those of all its competitors
Product Attributes Usually Emphasized by Cost Leadership Strategies
Reliability Low Prices
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 low-cost access to produc. inputs*
Important Sources of Cost Advantages for Firms 4-5
4. Technological advantages independent of scale 5. Policy Changes
Size Differences and Economies of Scale
Exist when the increase in firm size is associated with lower costs
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 and equip. 3.V. of P. and Employee Specialization,..OHcosts
Size Differences and Diseconomies of Scale
Can actually increase costs if firms grow too large.
Important Sources of Diseconomies of Scale
Physical limits to efficient size, managerial diseconomies, worker de-motivation, distance to markets and suppliers
Experience Differences and Learning-Curve Economies
Depends on their cumulative levels of production, the one with the greatest experience in manufacturing will have the lowest costs
Learning Curve and...
LC. and Economies of Scale LC. and Cost Advantages LC. and Competitive Advantage.
1st Difference between Economies of Scale and Learning Curves
Economies of Scale focuses on the relationship between the volume of production at a given point in time and average unit costs, the Lc cum. vp.