MGT 462 Chapter Notes - Chapter 2: Cost Leadership
Document Summary
Strategy - fundamental directions that an organization chooses. Guides the deployment of all resources, including compensation. An organization defines its strategy through the tradeoffs it makes in choosing what to do. Strategic perspective - focuses on those compensation choices that help the organization gain and sustain competitive advantage. Innovator - stresses new products and short response time to market trends. Cost cutter - efficiency-focused strategy stresses doing more with less by minimizing costs, encouraging productivity increases, and specifying in greater detail exactly how jobs should be performed. Customer-focused business strategy - stresses delighting customers and bases employee pay on how well they achieve this. Cost leadership strategy - firms that cut costs. Differentiation strategy - seek to provide a unique and/or innovative product or service at a premium price. Defenders - those that operate in stable markets and compete on cost. Prospectors - focused on innovation, new markets, and so forth.
