Crafting and Executing Strategy CH 5
Focused low cost strategy - ANSWER...-concentrating on a narrow buyer segment (or
market niche) and outcompeting rivals on costs thus being able to serve niche members
at a lower price
focused differentiation strategy - ANSWER...-concentrating on a *narrow buyer
segment* or market niche and outcompeting rivals with a *product offering that meet
specific tastes* and requirement of niche members better than the product offering of
rivals
Low cost provider strategy - ANSWER...-striving to achieve *lower overall costs* than
rivals on comparable products that attract a *broad spectrum of buyers*
broad differentiation strategy - ANSWER...-seeking to differentiate the company's
product offering from rivals' with *superior attributes* that will *appeal to a broad
spectrum* of buyers
best-cost provider strategy - ANSWER...-hybrid strategy that tries to beat out on quality
and price
cost driver - ANSWER...-factor that has a strong influence on a company's costs
Types of cost drivers - ANSWER...-1. Economies of scale
2. Learning experience
3. capacity utilization
4. supply efficiencies
5. input costs
6. production technology and design
7. communication systems and information technology
8. bargaining power
9. outsourcing or vertical integration
10. incentives systems and culture
Keys to being a successful low cost provider - ANSWER...--out managing rivals
-finding ways to perform value chain activities faster, more accurately, and more cost-
effectively
When a Low-Cost Provider Strategy Works Best - ANSWER...-1) Price competition
among rival sellers is vigorous.
2) Products of rival sellers are essentially identical products are readily available for
many sellers.
3) There are few ways to differentiate industry products with value to customers.
Focused low cost strategy - ANSWER...-concentrating on a narrow buyer segment (or
market niche) and outcompeting rivals on costs thus being able to serve niche members
at a lower price
focused differentiation strategy - ANSWER...-concentrating on a *narrow buyer
segment* or market niche and outcompeting rivals with a *product offering that meet
specific tastes* and requirement of niche members better than the product offering of
rivals
Low cost provider strategy - ANSWER...-striving to achieve *lower overall costs* than
rivals on comparable products that attract a *broad spectrum of buyers*
broad differentiation strategy - ANSWER...-seeking to differentiate the company's
product offering from rivals' with *superior attributes* that will *appeal to a broad
spectrum* of buyers
best-cost provider strategy - ANSWER...-hybrid strategy that tries to beat out on quality
and price
cost driver - ANSWER...-factor that has a strong influence on a company's costs
Types of cost drivers - ANSWER...-1. Economies of scale
2. Learning experience
3. capacity utilization
4. supply efficiencies
5. input costs
6. production technology and design
7. communication systems and information technology
8. bargaining power
9. outsourcing or vertical integration
10. incentives systems and culture
Keys to being a successful low cost provider - ANSWER...--out managing rivals
-finding ways to perform value chain activities faster, more accurately, and more cost-
effectively
When a Low-Cost Provider Strategy Works Best - ANSWER...-1) Price competition
among rival sellers is vigorous.
2) Products of rival sellers are essentially identical products are readily available for
many sellers.
3) There are few ways to differentiate industry products with value to customers.
