STEN 4980 Lecture Notes - Lecture 1: Fixed Cost, De Beers
Document Summary
Cost advantage: companies typically choose between one of two strategies for offering unique value to customers: cost advantage or differentiation advantage. Economies of scale and scope: one of the primary reasons large companies dominate many manufacturing and service industries is because of economies of scale. Economies of scale exist when an increase in company size (measured as volume of production) lowers the company"s average cost per unit produced. Business-level strategy: a business level strategy indicates how a firm intends to compete in a particular product/market and gain competitive advantage over its rivals. Cost advantage: a strategy in which the unique value offered to customers is lower-priced products or services. Differentiation advantage: strategy whereby companies attempt to gain competitive advantage by offering value that is not available in other products or services or that other products don"t do as well. (discussed in detail in ch.
