Answer key

Topics: Cost, Marketing, Psychographic Pages: 5 (760 words) Published: July 19, 2015
10. Embryonic industries, Growth industries, Shakeout industry, Mature industry and Decline industry

11.

12.

13. (Not important)
14.
Economies of scale
Learning / Experience curve
Capacity utilization
Linkage among activities
Interrelationship among business units
Degree of vertical integration
Timing of market entry
Firm’s policy of cost or differentiation
Geographical location
Institutional factor (regulation, union activity, taxes, etc.)
15. Technology is employed to some degree in every value creating activity. It impacts competitive advantages by making new configuration of the value chain possible Reduce the costs of activity

Reduce manpower cost
Reduce time required
Increase the efficiency of the activity
Increase output per unit time
Improve the quality of work

16. Considering the case in which the design of a product in changed in order to reduce manufacturing costs. Suppose that inadvertently the new product design results in increased service costs; the cost reduction could be less than anticipated and even worse, there could be a net cost increase. Sometimes however, the firm may be able to reduce the cost in one activity and consequently enjoy a cost reduction in another, such as when a design change simultaneously reduces manufacturing costs and improve reliability so that the service costs are also reduced. Through such improvements the firm has the potential to develop a competitive advantage.

17. Cost leadership, Differentiation and Focus Strategy.

18. Maximizing internal cost efficiencies ; Improve processing efficiencies ; Outsourcing non-essential activities ; Limiting internal expenditures on accommodation and management extras ; Managing and minimizing waste. Employee’s participant in cost management process and provide cost efficient incentives. Redesigning production process; Lower input materials cost. Relocating labour-based production.

19. Functional capabilities; product performance improvements; specifically targeting and satisfying customer’s needs.

20. Similar to overall cost leadership, but on a narrow segment-based approach, chosen segment’s needs are less than the average needs.

21. When the needs of the chosen segment are above the average, customers are willing to pay a premium prices.

22. Strengths, Weakness (internal)
Opportunities, Threats (external)

23. Strengths are internal capabilities that may help a company reach its objectives. They help companies capitalize on Opportunities and Decrease the impact of Threats.

24. A healthy company is one with a diversified, balanced portfolio containing: stars, whose high share and high growth assure the future, cash cows that supply funds for that future growth; question marks to be converted into stars with added funds. 25.

26.

27.
28. Market segmentation is the division of a market into different group of customers with distinctively similar needs and products / services requirements. The purpose of market segmentation is to leverage scare resources.

29. The major segmentation variables – geographical, psychographic and behavioral segmentation. Geographic segmentation divides the market into geographic units such as nations, states, regions, countries, cities or neighborhoods. In demographic segmentation, we divide the market on variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class. In psychographic segmentations, buyers are divided into different groups on the basis of psychological / personality traits, lifestyles, or values. People within the same demographic group can exhibit very different psychographic profiles. Behavioral Segmentation is a type of market segmentation based on differences in the consumption behavioral of different groups of consumers, taking into account their lifestyles, patterns of buying and...
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