THM 3312 Exam 1 Latest 2023 with complete solution
What is the strategy?
A plan of action or policy to achieve a major or overall aim
Understanding of broad environment and components
Societal trends and influences
Technological advances
Major innovations in other industries
Economic factors
Political and legal trends and influences
Suppliers are powerful if:
The industry is dominated by a few firms
Their products have few substitutes
Their product is important input to buyers' product
Their products are differentiated
Their products have high switching costs
Buyers are powerful if:
Purchase accounts for a significant fraction of a supplier's sales (corporate accounts)
They have full information
They have many choices
Political power
How to play out in an intense rivalry situation
Using price competition
Staging advertising battles (Coke vs Pepsi)
Increasing service warranties
Making new product introductions
Barriers to entry (Threat of new entrants)
Economies of scale
Product differentiation (uniqueness)
Capital requirements- more resources
Switching costs- frequent flyer
Access to distribution channel- nondurable goods (shelf space)
Government policy- licensing and permit requirements
Market Concentration
Seeks growth in current markets with current products
Market Development
Seeks growth in new markets with current products (expand)
Product development
New product possibilities in current markets
Concentric Diversification Strategy
Moving into new lines of business by adding new, but related products for the current
customer
Concentric Diversification Strategy Example
Wendy's introducing Java Fresh Mexican Grill to respond to customer's healthy eating
needs
Horizontal Diversification Strategy
What is the strategy?
A plan of action or policy to achieve a major or overall aim
Understanding of broad environment and components
Societal trends and influences
Technological advances
Major innovations in other industries
Economic factors
Political and legal trends and influences
Suppliers are powerful if:
The industry is dominated by a few firms
Their products have few substitutes
Their product is important input to buyers' product
Their products are differentiated
Their products have high switching costs
Buyers are powerful if:
Purchase accounts for a significant fraction of a supplier's sales (corporate accounts)
They have full information
They have many choices
Political power
How to play out in an intense rivalry situation
Using price competition
Staging advertising battles (Coke vs Pepsi)
Increasing service warranties
Making new product introductions
Barriers to entry (Threat of new entrants)
Economies of scale
Product differentiation (uniqueness)
Capital requirements- more resources
Switching costs- frequent flyer
Access to distribution channel- nondurable goods (shelf space)
Government policy- licensing and permit requirements
Market Concentration
Seeks growth in current markets with current products
Market Development
Seeks growth in new markets with current products (expand)
Product development
New product possibilities in current markets
Concentric Diversification Strategy
Moving into new lines of business by adding new, but related products for the current
customer
Concentric Diversification Strategy Example
Wendy's introducing Java Fresh Mexican Grill to respond to customer's healthy eating
needs
Horizontal Diversification Strategy
