Strategic Management Chapters 5 & 6 Flashcards

Among the various options given in question statement, the correct one is the first one, that is random step when we look at the chapter 1. Sequential steps (loops), conditional statements, and repeated steps are generally discussed in chapter one as they are the basics of python language.True. Q. Which of the following is not one of the Cryo Regisvine's weak points. Petal. Q. What is Keqing's title in the Liyue Qixing. Q. Which of the following characters will not have their Charged Attacks infused by Cryo DMG by Chongyun's Spirit Blade: Chonghua's Layered Frost.Analysis of the industry's profit pool enables strategic managers to: a. determine whether an industry will be viable in the long term. b. estimate profit potential Which of the following is a true statement about capabilities? a. Capabilities derive from the firm's capacity to deploy resources that have been...Pitfalls of Customer Retention Activities. February 2005. As a result, they have been unable to achieve the results they had expected. Customer retention policies should not be perceived as cure-alls; instead, they should be positioned as mere components of comprehensive differentiation...In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation? Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

Thousand Quiz with Paimon Event [Cheet Sheet] : Genshin_Impact

In my opinion, the main risks of a differentiation strategy are: 1. Differentiation is not sustained, because 1a. Competitors imitate. Services is another key. But, most of all, go back to Porter: "strategic positioning means performing different activities from rivals or performing similar activities...C) The relative orientation of the particles has an effect only if the kinetic energy of the particles is below some minimum value. A) The collision must involve a sufficient amount of energy, provided from the motion of the particles, to overcome the activation energy.A) Pursuing low costs so zealously that a company's product offering ends up being too features-poo to generate buyer appeal B) Getting carried away with overly aggressive price-cutting to win sales and market share away from rival firms C)...Differentiation strategy is one of the most important marketing strategy in today's business environment. With so many brands and so many varieties of products and so much advertising noise, it becomes very difficult but ultimately very necessary to differentiate your brand from competition.

Strategic Management Flashcards

85. Which of the following is not an example of when an organization should use an unrelated diversification strategy? a. When revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products. b. When an organization's present...multiple choice questions chapter introduction strategy which of the following are typically seen as being associated with strategic decisions? the direction. A group of managers is considering pricing strategy and differentiation. At which level of strategy are the managers most likely to be working?A. differentiation B. response C. cost leadership D. innovation. Answers from the community are free. Related questions. What is the consultative sales approach? Write a short note on the decline stage of the product life cycle.Differentiation strategy refers to the unique features in the goods and service offered by an organization which differentiate it... Which one of the following is NOT a way to effectively differentiate a company's branded footwear from the brands of rivals? o Provide free shipping...product exceeds the needs of buyers d. Overspending on efforts to differentiate the company's product offering. Explanation: In simple words, differentiation strategy refers to the strategy in which a firm tries to develop and introduce a unique product that the customers find different from the...

Table 5.4 Differentiation

Firms that compete on forte and target a extensive market are following a differentiation strategy. Several examples of companies pursuing a differentiation strategy are illustrate under.

Although salt is a commodity, Morton has differentiated its salt via constructing a model round its iconic umbrella girl and its trademark slogan of "When it rains, it pours." FedEx's former slogan "When it absolutely, positively needs to be there overnight" highlights the commitment to very speedy delivery that differentiates them from competitors similar to UPS and the U.S. Postal Service. Offering reminiscent of Hot Wheels cars and the Barbie line of dolls highlight toy maker Mattel's differentiation strategy. Both are updated regularly to mirror current developments and tastes. Nike differentiates its athletic footwear thru its iconic "swoosh" as well as an intense emphasis on product innovation through research and building.

The Walt Disney Company has advanced a large number of well known characters similar to Mickey Mouse, the Little Mermaid, and Captain Jack Sparrow that lend a hand differentiate their motion pictures, theme parks, and merchandise.

Learning Objectives Describe the nature of differentiation. Know the advantages and downsides of a differentiation strategy.

The Nature of the Differentiation Strategy

A well-known cliché contends that "you get what you pay for." This pronouncing captures the essence of a differentiation strategy. A firm following a differentiation strategy attempts to persuade consumers to pay a top rate price for its excellent or products and services by means of offering unique and fascinating options (Table 5.4 "Differentiation"). The message that such a company conveys to consumers is that you will pay a little bit extra for our offerings, but you are going to receive a good cost overall as a result of our choices supply one thing special.

In phrases of the two aggressive dimensions described by way of Michael Porter, using a differentiation strategy means that a company is competing in keeping with uniqueness quite than charge and is searching for to attract a extensive market (Porter, 1980). Coleman camping apparatus provides a just right example. If tenting equipment reminiscent of sleeping baggage, lanterns, and stoves fail throughout a tenting travel, the outcome will probably be, smartly, unhappy campers. Coleman's drowsing luggage, lanterns, and stoves are famend for his or her reliability and durability. Cheaper manufacturers are much more prone to have problems. Lovers of the outside should pay extra to purchase Coleman's goods than they would to acquire lesser manufacturers, however having equipment that you'll be able to depend directly to stay you heat and dry is price a fee top rate in the minds of maximum campers.

Coleman's patented stove was once at first developed to be used via infantrymen all the way through World War II. Seven a long time later, the Coleman Stove remains a must-have merchandise for campers.

Successful use of a differentiation strategy is determined by not best offering unique features but in addition speaking the value of those features to attainable customers. As a outcome, promoting basically and brand constructing particularly are vital to this strategy. Few items are extra elementary and generic than desk salt. This would seemingly make creating a differentiated model in the salt enterprise subsequent to unimaginable. Through artful marketing, however, Morton Salt has accomplished so. Morton has differentiated its salt by means of constructing a brand around its iconic umbrella girl and its trademark slogan of "When it rains, it pours." Would the conventional shopper be capable of inform the difference between Morton Salt and less expensive generic salt in a blind taste test? Not a probability. Yet Morton succeeds in convincing customers to pay a little additional for its salt thru its brand-building efforts.

FedEx and Nike are two different companies that have performed smartly at communicating to customers that they provide differentiated offerings. FedEx's former slogan "When it absolutely, undoubtedly needs to be there overnight" highlights the dedication to rapid supply that units the company aside from competition comparable to UPS and the US Postal Service. Nike differentiates its athletic shoes and attire via its iconic "swoosh" logo in addition to an intense emphasis on product innovation via analysis and development.

Developing a Differentiation Strategy at Express Oil Change

Express Oil Change and Service Centers is a chain of auto repair shops that stretches from Florida to Texas. Based in Birmingham, Alabama, the firm has more than 170 company-owned and franchised locations beneath its model. Express Oil Change tries to provide a distinctive level of carrier, and the firm is content material to let competitors offer less expensive costs. We requested an Express Oil Change executive about his company (Ketchen & Short, 2010).

Question:The auto restore and maintenance business is a pretty aggressive space. How is Express Oil Change being positioned relative to different firms, such as Super Lube, American LubeSpeedy, and Jiffy Lube?

Don Larose, Senior Vice President of Franchise Development:Every good enterprise sector is aggressive. The key to our success is to be extra convenient and provide a better general revel in for the customer. Express Oil Change and Service Centers outperform the business significantly in terms of buyer transactions consistent with day and shop gross sales, for a host of reasons.

In phrases of customer comfort, Express Oil Change is faster than most of our competition—we do a ten-minute oil alternate while the buyer stays in the car. Mothers with youngsters in automobile seats especially enjoy this feature. We also do mechanical paintings that different fast lube companies don't do. We change and rotate tires, do brake repairs, air con, tune ups, and others. There is no appointment important for many mechanical services like tire rotation and balancing, and checking brakes. So, total, we're more convenient than maximum of our competitors.

In terms of staffing our stores, full-time employees are all that we employ. Full-time staff are higher trained and usually have less turnover. They due to this fact have extra experience and do higher quality paintings.

We assume incentives are essential. We use a payroll device that provides incentives to the shop group of workers on how many automobiles are serviced on a daily basis and on the overall sales of the store, reasonably than on increasing the reasonable transactions by means of promoting the customer items they did not are available in for, which is what most of the trade does. We don't promote consumers things they don't but want, like air filters and radiator flushes. We focal point on building accept as true with, by way of acting with integrity, to get the buyer to come back and construct the day-to-day car count. This philosophy is not a slogan for us. It is how we operate with each buyer, in every shop, on a daily basis.

The placement of our retailers is every other key issue. We place our stores in A-caliber retail locations. These are lots that may value greater than our competitors are willing or ready to pay. We get what we pay for regardless that; we have now roughly 41% higher sales consistent with store than the industry moderate.

Question:What is the strangest interaction you've ever had with a doable franchisee?

Larose:I once had a franchisee candidate in New Jersey respond to a request by us for evidence of his liquid belongings through bringing to the interview about 0,000 in cash to the meeting. He had it in a bag, with bundles of it wrapped in blue tape. Usually, folks just bring in a reproduction of a financial institution or stock observation. Not positive why he had such a lot cash available, actually, and I didn't want to know. He didn't grow to be a franchisee.

Express Oil Change units itself aside through superior provider and nice locations.

Table 5.5 Executing a Differentiation Strategy

A differentiation strategy offers necessary advantages and downsides for firms that undertake it. Below we illustrate a few examples in terms of an continuously differentiated product–ladies's handbags.

Advantages Buyer loyalty is common amongst purse patrons. Many individuals experience seeing–and being noticed with–a fashion designer logo on the merchandise they buy comparable to the iconic C that is shown on Coach luggage. Chanel enjoys robust margins as a result of their well known identify lets them price a premium for his or her purses.

Disadvantages

Less-expensive bags from shops such as Target provide sufficient of a stylish glance to satisfy many price-sensitive buyers. These people will make a choice to save their money by warding off expensive bags from top-end designers.

Imitations might thieve consumers, akin to is common with knock-off purses bought by means of side road distributors.

Advantages and Disadvantages of Differentiation

Each generic strategy provides advantages that companies can doubtlessly leverage to revel in sturdy performance, as well as disadvantages that may injury their efficiency. In the case of differentiation, a key advantage is that efficient differentiation creates a capability to acquire top rate prices from customers (Table 5.5 "Executing a Differentiation Strategy"). This allows a firm to enjoy sturdy profit margins. Coca-Cola, as an example, currently enjoys a profit margin of approximately 33 percent, that means that about thirty-three cents of every dollar it collects from consumers is benefit. In comparability, Walmart's value leadership strategy delivered a margin of below Four percent in 2010.

In flip, sturdy margins imply that the firm does not wish to attract large numbers of shoppers to have a excellent general point of benefit. Luckily for Coca-Cola, the company does attract a nice many consumers. Overall, the company made a benefit of slightly below billion on sales of just over billion in 2010. Interestingly, Walmart's profits were only 25 p.c higher ( billion) than Coca-Cola's while its sales quantity (1 billion) was twelve instances as huge as Coca-Cola's.1 This comparison of benefit margins and overall profit levels illustrates why a differentiation strategy is so horny to many firms.

To the extent that differentiation remains in position over time, buyer loyalty could also be created. Loyal customers are very desirable as a result of they're not price touchy. In other phrases, purchaser loyalty makes a customer not going to change to any other company's products if that firm tries to scouse borrow the customer away through lower costs. Many soda drinkers are fiercely dependable to Coca-Cola's merchandise. Coca-Cola's headquarters are in Atlanta, and loyalty to the company is especially sturdy in Georgia and surrounding states. Pepsi and other brands have a hard time convincing loyal Coca-Cola fans to buy their drinks, even if providing deep reductions. This is helping stay Coca-Cola's income top because the company does not have to check any promotions that its rivals launch to keep its customers.

Meanwhile, Pepsi additionally has attracted a huge set of brand-loyal customers that Coca-Cola struggles to steal. This enhances Pepsi's income. In contrast, store-brand sodas equivalent to Sam's Choice (which is sold at Walmart) seldom attract loyalty. As a result, they should be offered at very low prices to transport from shop shelves into buying groceries carts.

Beyond existing competition, a differentiation strategy additionally creates advantages relative to potential new entrants. Specifically, the model loyalty that buyers really feel to a differentiated product makes it tough for a new entrant to lure these consumers to adopt its product. A new soda model, as an example, would battle to take shoppers away from Coca-Cola or Pepsi. Thus a differentiation strategy is helping create limitations to access that protect the company and its business from new pageant.

The giant possibility when the usage of a differentiation strategy is that buyers will not be prepared to pay further to procure the distinctive options that a company is trying to construct its strategy round. In 2007, division store Dillard's stopped sporting males's sportswear made through Nautica because the seafaring theme of Nautica's brand had lost much of its cache amongst many men (Kapner, 2007). Because Nautica's uniqueness had eroded, Dillard's believed that area in its retail outlets that Nautica have been occupying could be better allocated to other manufacturers.

In some instances, consumers would possibly simply desire a inexpensive selection. For instance, merchandise that imitate the appear and feel of choices from Ray-Ban, Tommy Bahama, and Coach are horny to many value-conscious shoppers. Firms comparable to these must paintings exhausting at product development and marketing to ensure that enough shoppers are prepared to pay a top class for their goods quite than settling for knockoffs.

In other instances, customers need the unique features that a firm gives, but competitors are in a position to mimic the features well sufficient that they're no longer unique. If this occurs, shoppers haven't any reason why to pay a premium for the company's choices. IBM experienced the pain of this scenario when executives attempted to apply a differentiation strategy in the private laptop marketplace. The strategy had labored for IBM in different areas. Specifically, IBM had enjoyed a nice deal of success in the mainframe computer marketplace through providing awesome carrier and charging shoppers a premium for their mainframes. A enterprise proprietor who depended on a mainframe to run her company could not have the funds for to have her mainframe out of operation for lengthy. Meanwhile, few companies had the abilities to mend their very own mainframes. IBM's message to consumers was once that they would pay extra for IBM's products however that this was once a good investment as a result of when a mainframe needed upkeep, IBM would provide quicker and higher service than its competition may. The buyer would thus be open for enterprise once more in no time after a mainframe failure.

This positioning failed when IBM used it in the private laptop marketplace. Rivals reminiscent of Dell were in a position to supply service that was once simply as just right as IBM's whilst also charging decrease costs for personal computer systems than IBM charged. From a buyer's point of view, a particular person could be foolish to pay more for an IBM non-public computer since IBM did not be offering anything else unique. IBM regularly lost marketplace proportion as a consequence. By 2005, IBM's struggles led it to sell its non-public pc business to Lenovo. The company is nonetheless a hit, then again, inside the mainframe market where its offerings remain differentiated.

Firms following a differentiation strategy should "watch" out for counterfeit goods equivalent to the pretend Rolexes proven right here.

Key Takeaway Differentiation will also be an efficient business-level strategy to the extent that a firm offers unique options that persuade customers to pay a top class for their goods and products and services. Exercises What are two industries in which a differentiation strategy can be tough to put into effect? What is an example of a differentiated enterprise close to your college or college? Name 3 ways companies that offer leisure that would possibly better differentiate their services and products. How would possibly they do this?

1Profit statistics drawn from Standard & Poor's stock stories on Coca-Cola and Walmart.

References

Kapner, S. 2007, November 1. Nautica brand losing floor. CNNMoney. Retrieved from http://money.cnn.com/2007/10/31/news/companies/Kapner_Nautica.fortune/index.htm.

Ketchen, D. J., & Short, J. C. 2010. The franchise player: An interview with Don Larose. Journal of Applied Management and Entrepreneurship, 15(4), 94–101.

Porter, M. E. 1980. Competitive strategy: Techniques for inspecting industries and competition. New York, NY: Free Press.