Managing Complex Environment Chapter 2

Top Hat Questions

Low cost Strategy is selling product or service at a lower price than compeitors

False

What are the two basic avenue pursue compeitive advantage

Prdouct or service with higher perceived value

Producing product or service at a lower cost

Primary

* Operation would be consider what type of activity in value chain 

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Support

* WHat would human resource be consider what type of activity in value chain

Value Chain

WHen executing chosen strategy we must look at activites to look at areas to optimize

Cost Drivers

IN attempting to execute low cost strategy we should found____ to optimize

Value Drivers

IN pursuit of differenitaiton straregy we should look ___ to optimize

Primary Functions

primary and support functions or primary support activites what would we look to optmize

COnvenience good

Yogurt purchases to eat for lunch

produciton good

Yogurt purchased for an ingredient

Strategy

Coordinated set of action that manager take to outperform orgnaization compeittor and achieve superior success

Competitive Advantage

Type of edge over rivals in attracting buyer and competing with competitive forces

Sustainable Advantage

When advanatge persist despite the best effort of competitors to match or surpass

Proactive

planned initative to improve company financial performance and secure a competitive edge

Reactive

responding to unanticipated developments and fresh market conditions

Temporary Compeititve Advantage

Edge over rival is short lived or is gonna be short lived

Comparative parody

No one really has a edge

Competitive Disadvantage

Worse than rival and cant get out of the state

Low cost edge

Producing more efficient

Tangible resource\`

Can quantify and write down and see how much it is worth to firm

Intangible resource

Cant write it down can see it perform better

Proactive Strategy

Planned part of strategy

Reactive strategy

Emergin part,react to changing in the market

What is realized stratgy

Proative and reactive.

WHat is low cost

producing more good or service more efficiently than competitors

Low cost leadershp

industry gold standard to produce more efficiently

Differentiation

Attract buyer by providing a unique good or service

Over-Differentiating

Technology is too good for product and what the goal of product is.

Deliberate strategy

Deliberate part of original plan

Emergent Strategy

is previous strategy but new things cause environment was adapted

Value Chain

Set of activites that an organization carries out to create value for customer

Successful Differenitation

INcrease unit sales,Gain buyer loyalty, A premium price for its proudct

Focused Low-cost

When firm can lower cost significantly by limiting its customer base to a well-defined buyer segment

Focused Differentiation

Superior Products tailored to unique preferences of narrow,well-defined group of buyers

Consumer Market (B2C)

All individual that want good and service for personal consumption or use

Business to Business (B2B)

Individual/Organization want good and service to use in producing other goods and services. or to sell,rent,or supply goods to others

Market Segmentation

Divide and total market into a group who have similar characteristic

Target Marketing

Choosing part of the total market to focus on. To increase profit share or decrease

Geographic Segmentation

Cities,COntries,State or region

Demographic Segmentation

Age income and education level

PsychoGraphic Segmentation

Groups values attitude interest

The Marketing Mix

Product PRice PRomotion and Price.

PRoduct

WHat does customer want from this product

HOw will customer use this product

What should it be called and how should it be branded

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COnvenience Good

Product consumer want to purchase frequently with little effort

Shopping Good

Product consumer buy only after comparing value(Quality,price,style) from multiple sellers

Speciality Good

Product with unique characterisstic and brand identity

Unsought Good

Product consumer havent thought of or need to solve an unexpected problem

PRoduction Good

Raw material

COmponent parts(Engines)

Production materials(Nuts and bolts)

Support goods

INstallations(BUilding ,equipment,Capital rentals)

Accessory equipment(Tools and office equipment)

Supplies(Paper clips,stationary,and other office supplies)

Service(maintence and repair)

Brand awareness

how wuickly or easily a given brand name comes to mind when a product category is mentioned

brand prefernce

when thy prefer one brand over another

BRand insistance

they will not accept substitute brand

Total product offer

everything consumer evaluate when deciding whether to buy something

Product life cycle

THeoretical model of what happens to sale and profit for a product class over time.

Introduction,Growth,MAturnity,Decline

Cost based pricing

Base pricing of how much its cost

Demand based pricing

Looking into market start with a price and then profit margin

Competitive base pricing

Below or above competiors

BReak even analysis

Given fixed and variable cost what would i have to sell to have breakeven

Skimming price strategy

Few Compeitors

Increase price

Putting price low to attract customer and dont flucuate

Everyday low pricing

Setting lower than competitors and not having any special sales

High-low pricing strategy

Setting prices higher than EDLP but running special sales that bring prices lower than competitors

Psychological pricing

Pricing product at a price point that make the product appear less expensive than it is

Penetration strategy

Priced low to attract many customer and discourage competion

Promotion

THe tchnique seller use to inform people about and motivate them to buy their product

Promotion Mix

The combination of promotional tool on organizationa uses

Advertising

Paid, nonpersonal communication through various media by organization and individuals who are in the some way identified in the message

Personal selling

Face to face presentation

Public relations

Function deal with message thorugh media resources

Publicity

not paid or controlled by seller. any information about an individual,product or orgnaization that is distributed through media

Sales Promotion

Promotional tool to get consumer purchasing started

Market INtermediaries

Any Organization that help move product to final buyer B2B or B2C

CHannel Of Distribution

Join Together to transport and store food in their path from producer to consumer

Agent/Brokers

Bring buyers and sellers together

WHolesalers

Sell to other organization

Retailers.

Sell to ultimate consumers

Utility

The want satisfying ability or value that organization add to goods and service when product are made more useful or accessible to cosumer than they were before

Production

Creation of Finished goods and servcies using the factor of production

Production Management

Activites manager do to help firm create goods

Operations Management

Specialized area in management that converts of transform resource into good & services.

Continous Process

Long production runs turn out finsihed products over time

Intermittent process

Production run is short and the machines are changed frequently to make different products

Capacity

Upper Limit Or Ceiling on the load that an operating unit can handle( PHysical unit produed (Widget per hour) or number of service rendered(COmputer Graded per hour)

Lead Time

Time goes on and buyers receive products

Carrying/Holding Cost

Cost with storing inventory

Forecasting

Estimating future value of variable

Supply Chain

Sequence of organization involved in producing good or service

Financial Managemenet

job of managing firm resource to meet goal and objective

Debt Financing

funds raised through form of borrowing must be paid

Equity Financing

Money raised through sales of ownership in the firm

Budget

Expectation and allocate resource throughout firms

Capital BUdget

Long term horizon

Cash BUdget

Estimate cash inflow and outflow (Month/Quarter)

Operation (Master)Budget

Ties together firms budget and summarized proposed activities

Financial Control

Process in which firm periodically compare is actual revenue ,cost and expense with its budget

Balance Sheet

Asset,Liabilities,Owner Equity.

Asset are equal to or balance with the liabilty and owner equity

Current Assets

item that can be converted into cash within current year

Fixed Assets

Asset that re relatively permanent such as land building and equipments

INtangible Assets

Long term assets that have no physical form but do have value

Current liabilities

Dues within a year

Account Payable

liabilites involving money owed to other for merchandise or service purchased on credit but not yet paid for