Business Level Strategy

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What is a strategic business unit (SBU)?
Supplies goods or services for a distinct domain of activity
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What are the two types of SBU business strategy?
Generic strategy (Porter) and interactive strategy
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What is the low cost broad market type of generic strategy? (Porter)
Cost leadership
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What is the high cost broad market type of generic strategy? (Porter)
Differentiation
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What is the low or high cost, narrow market type of generic strategy? (Porter)
Focused strategy
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What are the 4 key cost drivers for cost leadership?
Lower input costs, economies of scale, economies of learning and product techniques & designs
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What is the law of experience within economies of learning?
The unit cost value added to a standard product declines by a constant percentage each time cumulative output doubles
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What is the goal of value chain analysis?
To minimise the operational costs throughout the value chain
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What is differentiation?
Uniqueness along some dimension that is valued by customers, allowing for a price premium
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What are the components of The Strategy Clock? (Bowman)
Low price & low added value, low price, hybrid, differentiation, focused differentiation, risky high margins, monopoly pricing and loss of market share
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What is strategic lock-in?
When users become dependent on a supplier and are unable to use another supplier without substantial switching costs
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What are blue oceans?
New market spaces where competition is minimised
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What are red oceans?
Industries that are already well defined where rivalry is intense
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What is game theory in relation to strategy?
Encouraging an organisation to consider its competitors' likely moves and the implications of these moves for its own strategy
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Other cards in this set

Card 2

Front

What are the two types of SBU business strategy?

Back

Generic strategy (Porter) and interactive strategy

Card 3

Front

What is the low cost broad market type of generic strategy? (Porter)

Back

Preview of the front of card 3

Card 4

Front

What is the high cost broad market type of generic strategy? (Porter)

Back

Preview of the front of card 4

Card 5

Front

What is the low or high cost, narrow market type of generic strategy? (Porter)

Back

Preview of the front of card 5
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