4 which factors should be created that the industry

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Unformatted text preview: factors should be raised well above the industry’s standard? 4. Which factors should be created that the industry has never offered? The first question forces managers to consider eliminating factors that may have made sense in the past, but do not add much value to buyers today. The second question forces them to consider reducing factors that may have been over-designed in the race to beat the competition. Hence those two questions address the low cost side of the equation by helping companies reduce their cost structure. The third question forces managers to uncover and eliminate the compromises that the industry has forced buyers to make. The fourth question helps managers discover new sources of value for buyers. The last two questions address the differentiation side of the equation. Functional Appeal to Buyers refers to the functional utility buyers receive from a business or product/service based on basic calculations of utility and price. Competition in an industry tends to converge on one of two possible basis of appeal. Some industries focus principally on price and function based l...
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This note was uploaded on 10/21/2012 for the course ECON 45 taught by Professor Mikel during the Spring '12 term at Art Institute of Atlanta.

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