Term
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Definition
| the key source of customer value, to its target market. Must be developed by a firm to build and preserve a significant market. |
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| firms approach for creating and sustaining its value proposition. |
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| Determinants of business strategy |
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Definition
Core competencies and capabilities.
Competitive Landscape.
Sustainability. |
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| Core competency and capability |
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| the skill set and expertise that characterizes a firm and its employees and advantages the the firm relative to its competitors. |
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Definition
Intensity of competition.
Bargaining power of customers.
Bargaining power of suppliers.
Barriers to new entrants.
Threats from substitute devices. |
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| a difficult strategy to imitate by competitors because of the unique resource capabilities and market power it brings. |
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| Types of business Strategies |
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Definition
1. Cost Leadership
2. Value Differentiation |
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Definition
| strategy to find innovative ways to improve business processes and cut cost. |
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| Focuses on R&D and product innovation activities. |
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| a set of logically sequenced, value-adding activities that convert input resources into products or services in a manner consistent with the chosen business strategy. |
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Definition
Development
Introduction and Growth
Maturity
Decline
Emphasizes that the objective is to maximize the profitability of a product over its entire life cycle |
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Term
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Definition
| No expected revenue from product. Significant expenditure on product. If development goes well investment in capital starts. |
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Definition
| Revenue begins to pick up. Profitability is typically low due to high variable cost and cost of strategies to enter market. |
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Definition
| Point where product reaches its targeted market potential and compares well against competing products. Profit generating stage. |
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Definition
| The final stage, sales and profit decline as firms cut prices to clear inventory. Planning decisions focus on extracting any money from resources. |
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Definition
| A structured approach to cost planning and management. The firm is a price taker and that there is intense competition to acquire, retain , and grow customers. Determines cost by working backwards from the customer value |
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Term
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Definition
| = Price point - Target Profit Margin |
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Term
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Definition
| the difference between the current cost and the allowable cost |
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