Business Strategy and Marketing Lecture Notes

Flashcards covering business strategy concepts, marketing principles, case study outcomes, and product development frameworks.

Strategy

The answer to three big questions: where are we now, where do we want to go, and how will we get there?

Competitive Advantage

A greater profit margin than a competitor for selling the same thing and doing the same thing.

Sustainable Competitive Advantage (SCA)

The ability to defend a competitive advantage or make it harder for competitors to copy it.

Five-Forces Model (Specified Order)

The evaluation order: i. Power of suppliers, ii. Rivalry among sellers, iii. Power of buyers, followed by threat of substitutes and threat of new entrants.

Key Success Factors (KSFs)

The $5-6$ factors in an industry that have the biggest impact on success or competitive loss.

VRIN Test

An assessment used to determine if a resource is competitively important based on being Valuable, Rare, In-imitable, and Non-substitutable.

Core Competence

One or two things a company does best or must do well to compete in an industry.

Distinctive Competence

A core or other competence that a firm does uniquely well or better than its competitors.

SWOT Analysis

An internal analysis of Strengths and Weaknesses, and an external analysis of Opportunities and Threats.

Benmarking

A comparison of a company's costs and value to the buyer against other firms in the industry.

Low-Cost Strategy

Using a lower-cost edge to under-price competitors or earn higher profit margins on units sold at present prices.

Focused Differentiation

Developing carefully designed products for a narrow, well-defined group of buyers, such as eHarmony targeting marriage-minded singles.

Best-Cost Strategy

A hybrid approach providing good features/functions at a reasonable price that is lower than rivals but not the absolute lowest.

Industry Life Cycle Stages

The four stages of industry evolution: introduction, growth, maturity, and decline.

Discontinuous Technological Change

A disruption that destroys the resources and capabilities of incumbent firms and is almost always introduced by entrants.

Strategic Alliances

Cooperative arrangements where companies join forces to achieve common goals, though $60-70\%$ of them fail.

Merger

An operation where two companies combine into a newly created company.

Acquisition

An operation where one company absorbs the operations of another company.

Backward Integration

Extending the value chain closer to the supply to gain greater profitability on components.

Forward Integration

Extending the value chain closer to customers to gain better market visibility and differentiation.

Marketing

The activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, stakeholders, and society.

Hedonic Value

Marketing value that is experiential, irrational, and based on pleasure-seeking.

Utilitarian Value

Marketing value that is objective, rational, and usually related to economics.

STP

The marketing process of Segmentation (grouping traits), Targeting (choosing a segment), and Positioning (brand perception).

Marketing Mix (4 Ps)

The program consisting of Product, Place, Price, and Promotion.

Cash Cows

Products in the BCG matrix with a large market share in a stabilized, low-growth market.

Stars

Products in the BCG matrix with good market share in a highly volatile, high-growth market.

High Involvement Purchase

A purchase for products that are expensive, have serious personal consequences, or reflect on a social image.

Derived Demand

In B2B markets, when the demand for a product is tied to the demand for the buyer's final product.

Trading Down

The repositioning strategy of reducing features or quality to change the value added, such as Air Canada Rouge.

Total Value Concept

The idea that a product's value includes basic core benefits, the actual product, the augmented product, and 'feel' benefits.

7-Stage New Product Development Process

A waterfall process: 1. Strategy Development, 2. Idea Generation, 3. Screening, 4. Business Analysis, 5. Development, 6. Market Testing, 7. Commercialization.

Brand Equity

The intangible added value endowed to products based on brand elements, marketing integration, and associations.

Skimming Pricing

Setting a high price when initial buyers are not price sensitive to send a quality signal.

Penetration Pricing

Setting a low price to attract buyers away from competitors.

Price Elasticity of Demand

The $\text{\%}$ change in quantity demanded relative to the $\text{\%}$ change in price.

Disintermediation

The conflict resulting from moving from indirect channels to direct channels, potentially losing distribution.

Push Strategy

Directing the promotional mix toward channel members to gain cooperation in ordering and stocking a product.

Pull Strategy

Directing the promotional mix at ultimate consumers to encourage them to demand the product from channels.

Patent

A legal right preventing others from making, using, or selling an invention for up to $20$ years.