Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

A collection of vocabulary flashcards covering key concepts from the lecture on business strategy.

Differentiation

Creating higher value by delivering products or services with unique features.

Cost Leadership

The strategy of delivering products or services at a lower cost and lower prices than competitors.

Blue Ocean Strategy

A strategic approach that aims to create new market spaces ('Blue Oceans') rather than competing in existing markets ('Red Oceans').

Competitive Advantage

The ability of a firm to outperform its competitors by creating more economic value.

Scope of Competition

Refers to the range of products or services a business targets to serve, either broadly or narrowly.

Strategic Position

A profile based on value creation and cost in a specific product market, determining how a firm competes.

Economies of Scale

Cost advantages that a business obtains due to the scale of its operation, with cost per unit of output decreasing with increasing scale.

Firm Effects

The impact of a company's individual characteristics, resources, and capabilities on its competitive advantage.

Value-Cost Tradeoff

The balance between maximizing customer value and minimizing costs in a business strategy.

Learning Curve

A concept that suggests that the more a company produces a product, the lower the costs become due to increased efficiency.

Niche Strategy

A strategy that targets a specific segment of a market, focusing on particular customer needs.

Strategic Trade-Offs

Decisions made by a company to pursue either cost leadership or differentiation, balancing the two to maximize profit.

Cumulative Output

The total quantity of product produced over time, often used to analyze cost behaviors.