{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

notes_MGMT101_summary of the book

Underestimating the challenges of integrating aspects

Info icon This preview shows pages 7–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Underestimating the challenges of integrating aspects of the value chain e.v.3. Miscalculating sources of revenues and profit pools f. Industry Life Cycles chart on 183 – introduction, growth, maturity, and decline over the life of an industry. Many industries have many life cycles (like a cosine function or something) f.i. Strategies in the introduction stage – f.i.1. Few players, not well-defined market segments, low growth, operating losses, need for cash to finance f.i.2. First mover is good to establish name and set-up the “standard” f.i.3. Being a late mover can be good too bc you can learn from competitors mistakes f.ii. Strategies in Growth Stage f.ii.1. Strong inc in sales, competitors attracted, focus is to build customer preferences, brand recognition, and differentiated products f.ii.2. Repeat customers are key in this stage f.iii. Strategies in maturity f.iii.1. Industry demand slows, direct competition ensues as firms drop,
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
f.iii.2. Advantages in manufacturing efficiencies become more important in addition to advertising bc no new people are buying so you must compete over existing demand f.iii.3. Firms change customer mentality to skip over phases of the life cycle f.iii.3.a. Reverse positioning - strip away product attributes while adding new ones f.iii.3.b. Breakaway positioning – escape category and enter new one which redefines competition f.iv. Strategies in the decline stage f.iv.1. Sales and profits down, occurs bc of technology usually (typewriters), many competitors liquidate intensifying price competition, decisions become dependent on rivals f.iv.2. Maintaining – stay and hope competitors leave f.iv.3. Harvesting – wring out as much profit as possible by cutting down to only primary and support activities f.iv.4. Exiting the market – f.iv.5. Consolidation – buy the remaining top firms f.v. Turnaround strategy – reversing a firm’s decline usually in maturity or declining stage f.v.1. Asset and cost strategy – sell unproductive assets, increase receivables collection, outsourcing f.v.2. Selective product and market pruning – eliminate product lines that are losing and invest in those that are profiting f.v.3. Piecemeal productivity improvements – improving business processes by reengineering them, benchmarking specific processes against the industry, etc 6. Lecture 5 – Corporate Strategy a. Related diversification – leveraging core competencies and sharing activities (economies of scale) a.i. Core competencies – something your firm is particularly good at. The following increase their value a.i.1. It must enhance the competitive advantage a.i.2. Businesses in the corporation must be similar in one material way a.i.3. The core competencies must be difficult to imitate for find substitutes for a.ii. Sharing activities – common factory facilities, distribution channels, and sales forces. There are two payoffs a.ii.1. Deriving cost savings through sharing activities a.ii.2. Larger revenue and differentiation b. Related diversification – market power logic b.i. Pooled negotiating power b.ii. Vertical integration – b.ii.1.
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern