BADM-449-Class-6 - BADM 449 Class #6 Internal Analysis:...

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BADM 449 – Class #6 Internal Analysis: Resources and Capabilities Generic Business Level Strategies Positioning and Competitive Dynamics
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Competitive Advantage What is it? Examples?
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Cost Leadership: Origins Experience curve : Doubling of cumulative production typically reduces unit costs by a certain percentage. Economies of learning Economies of scale and scope Technical input-output relationships Indivisibilities of advertising, R&D, product design, and other expenses Specialization / division of labor Capacity utilization Input costs Location Non-union labor Ownership of low-cost sources of inputs
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Cost Leadership Strategy “No- frills” Products Large Target Markets Long Production Runs, Economies of scale and Scope, Automation Uniform Packaging Less R&D and more process focus
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Risks of a Low-Cost Strategy All or nothing, especially if technologies change May lead to loss of important product attributes, especially when focusing on costs only. Can it be easily imitated? Cost differences tend to decline in mature industries What happens if several firms try to move aggressively down the learning curve or target high utilization?
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Willingness to Pay: Origins Why are people (and businesses) willing to pay a premium when it comes to certain products?
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This note was uploaded on 04/02/2012 for the course BADM 449 taught by Professor Echambadi during the Fall '10 term at University of Illinois, Urbana Champaign.

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BADM-449-Class-6 - BADM 449 Class #6 Internal Analysis:...

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