BUSI
Study G Quiz 2.docx

Cost advantages might include factors such as patents

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Cost advantages might include factors such as patents, control of a specific raw material, or access to cheaper funds. When customer switching costs —that is, costs that accrue to a consumer that intends to switch from the product offering of an established company to the product offering of a new entrant—are high, potential new entrants are discouraged. Government regulation, such as establishing a protected monopoly, tends to protect established firms, and thus constitutes a barrier to entry. When industries are deregulated, new entrants usually proliferate. c. 5. Substitutes perform the same or different function but through a different means. According to Porter, substitutes can lure customers away. To limit the threat of substitutes, one should offer better value through providing wider product accessibility. A good example of this would be soft-drink producers introducing vending machines and convenience store channels to improve the availability of soft drinks relative to other beverages. The industry must distance itself from the substitute. According to the course slides, the better the relative value of the substitute, the smaller the profit margin will be. 7) How has Southwest Airlines been so successful? Southwest Airlines has been so successful because they have shaped out a unique and valuable strategic position based on a tailored set of activities. With the routes served by Southwest, they are maintaining competitive advantage with convenience and low costs. Southwest’s mapping compliments each other as it provides top-tier customer service, low ticket prices, frequent reliable departures and highly productive ground and gate crews etc. When activities compliment each other, rivals get little benefit from imitation unless they successfully mock the entire system. Another reason this airline has had so much success is because they have a solid understanding about who their competition is and have completely aligned their business around it. They have mastered strategy and strategy is creating a fit among a company’s activities. According to the course slides, success depends on doing many integrated things well and Southwest is doing just that.
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Mission Statement: the first stage of a strategic management is for the organization to establish or examine if the business currently has a mission statement. Mission Statement explains the organizations goals and purpose and reason of existence in simple terms. Mission statements are usually broad and limited in a couple of sentences. Although, it is statement in simple terms, it is often challenging for business leaders to put them together and formulate it into a clear and understanding terms and aligned it with the organization’s objectives since it is a foundation for everything that the organization does. For instance, the Pepsi Co, Mission statement is “Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for
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  • Spring '15
  • Dr.RavenDavenport

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