Business-Level Strategy and the Industry Environment

These flashcards cover key vocabulary terms and definitions related to business-level strategies and industry environments as discussed in the lecture notes.

Fragmented industry

An industry composed of a large number of small- and medium-sized companies.

Value innovator

A company that defines value differently than established companies and offers it at a lowered cost through scale economies.

Chaining

A strategy that establishes a network of linked merchandising outlets interconnected by information technology.

Franchising

A strategy where a franchisor grants the franchisee the right to use the franchisor’s name and business model in exchange for fees.

Horizontal mergers

Merging with or acquiring competitors to promote economies of scale and build a compelling national brand.

Competitive chasm

The transition between an embryonic market and a mass market, requiring new strategies to address different customer needs.

Product proliferation strategy

A strategy that fills market niches to deter entry by competitors.

Limit price strategy

Setting a price lower than necessary to signal to new entrants that the incumbent has a low-cost structure.

Price signaling

An approach where companies adjust product prices to communicate intentions to other firms.

Market penetration

A strategy focusing on expanding market share within existing product markets.

Capacity control

Strategies devised by companies to manage capacity expansion and prevent excess capacity.

Niche strategy

Focusing on specific market segments that are declining more slowly than the overall industry.

Harvest strategy

Reducing assets in a business to minimize costs and maximize profits from investment.

Divestment strategy

Exiting an industry by selling business assets to another firm.