Linking companies with their suppliers distributors

This preview shows page 10 - 12 out of 22 pages.

linking companies with their suppliers, distributors and customers, information networks provide another source of flexibility oCustomer Relational Management– one form of an information based network processthat firms use for this purpose Total Quality Management Systems (TQM) Page 10 of 22
Strategic Management Prelim IIoManagerial innovation that emphasizes an organization’s total commitment to the customer and to continuous improvement of every process through the use of data drive, problem solvingapproaches based on empowerment of employee groups and teams oDevelop and use TQM in order to:Increase customer satisfactionCut costsReduce the amount of time required to introduce innovate products to the marketplace oHelps the firm develop the flexibility needed to spot opportunities to simultaneously increase differentiation and reduce costs – yet they are available to all competitors Competitive Risk:oRisk 1: firms find it difficultto perform primary and support activities in ways that allowthem to produce relatively inexpensive products with levels of differentiation that create value oRisk 2: stuck in the middle… means that the firm’s costs structure is not low enough to allow it to attractively price its products and the products are not sufficiently differentiated to create valueChapter 6: Corporate-Level StrategyCorporate-level strategy- specifies actions a firm takes to gain a competitive advantageby selecting andmanaging a groupof different businessescompeting in different product marketsLevels of DiversificationA firm is related through its diversification when its businesses share several links (ex. products, technologies, or distribution channels)oThe more links among businesses, the more "constrained" is the relatedness of diversification LowLevels of Diversification Single-BusinessDiversification Strategy- a corporate-level strategy wherein the firm generates ≥ 95%of its sales revenue from its corebusiness areaEx. WrigleyDominant-BusinessDiversification Strategy- the firm generates 70%-95%of its total revenue within a single businessarea Ex. UPSModerateand HighLevels of DiversificationA firm generating ≥ 30%of its revenue from outsidea dominant business and whose businesses are relatedto each other in some manner uses a related diversification, corporate-level strategyRelated ConstrainedDiversification Strategy- < 70%of revenue comes from the dominantbusiness, and all businessesshareproduct, technological, and distribution linkages The links between the diversified firm's businesses are rather direct Ex. Proctor & GambleRelated LinkedDiversification Strategy- < 70%of revenue comes from the dominantbusiness, and there are only limitedlinksbetween businesses Transfer more knowledge and core competencies, rather than resourcesEx. General ElectricVery HighLevels of DiversificationUnrelatedDiversification Strategy- < 70%

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture