Professional Documents
Culture Documents
52
Exercise 1
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COST-EFFICIENT MANAGEMENT
OF VALUE CHAIN ACTIVITIES
Cost Driver
Is a factor with a strong influence on a firms costs.
Can be asset- or activity-based.
Securing a Cost Advantage:
Use lower-cost inputs and hold minimal assets
Offer only essential product features or services
Offer only limited product lines
Use low-cost distribution channels
Use the most economical delivery methods
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THE KEYS TO BEING A SUCCESSFUL
LOW-COST PROVIDER
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WHEN A LOW-COST PROVIDER
STRATEGY WORKS BEST
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BROAD DIFFERENTIATION STRATEGIES
58
COST-EFFICIENT MANAGEMENT
OF VALUE CHAIN ACTIVITIES
59
Exercise 2
511
REVAMPING THE VALUE CHAIN
SYSTEM TO INCREASE
DIFFERENTIATION
512
Delivering Superior Value via a
Broad Differentiation Strategy
Broad Differentiation:
Offering Customers Something That Rivals Cannot
513
WHEN A DIFFERENTIATION
STRATEGY WORKS BEST
Market Circumstances
Favoring Differentiation
514
PITFALLS TO AVOID IN PURSUING
A DIFFERENTIATION STRATEGY
515
FOCUSED (OR MARKET NICHE)
STRATEGIES
Focused Strategy
Approaches
Focused Focused
Low-Cost Market Niche
Strategy Strategy
516
WHEN A FOCUSED LOW-COST OR
FOCUSED DIFFERENTIATION
STRATEGY IS ATTRACTIVE
The target market niche is big enough to be profitable
and offers good growth potential.
Industry leaders chose not to compete in the niche
focusers avoid competing against strong competitors
It is costly or difficult for multi-segment competitors to
meet the specialized needs of niche buyers.
The industry has many different niches and segments.
Rivals have little or no interest in the target segment.
517
THE RISKS OF A FOCUSED LOW-COST OR
FOCUSED DIFFERENTIATION STRATEGY
518
BEST-COST PROVIDER
STRATEGIES
Best-Cost Provider
Hybrid Approach
Value-Conscious Buyer
519
WHEN A BEST-COST PROVIDER
STRATEGY WORKS BEST
Best-Cost
Low-Cost High-End
Provider
Providers Differentiators
Strategy
521
SUCCESSFUL COMPETITIVE
STRATEGIES ARE RESOURCE-BASED
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