MGT 247 Study Guide - Final Guide: Open Innovation, Customer Service, Adverse Selection
Document Summary
Business strategies (competitive strategies: business level strategy = competitive strategy, generic competitive strategies. Idea behind the framework is that all competitive strategies can be classi ed as one of 4 types (we will explain the 5th one later) Dimensions of framework are: type of competitive advantage. Value advantage (generally labeled differentiation or uniqueness) ( v: competitive scope. Customer segments served (what products for whom: broad = many segments, narrow = few segments, differentiation: invest in customer value emphasize unique or superior product features for which the buyer is willing to pay. Typically, sell non-standardized products to customers who care about the particular features offered more than they care about paying a low price. High willingness-to-pay allows rm to set higher prices. Emphasis on value drivers over cost drivers: cost leadership: invest to achieve the lowest costs. Typically, sell standardized products to the average customer cost ef ciencies in production, distribution and marketing. Lower costs allow rm to set lower prices.
