Brand Recognition, Service Quality and Price Competition - PowerPoint by ghl13049

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Brand Recognition, Service Quality and Price Competition document sample

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									Strategy and Cost
Management

   Controlling costs by focusing on core
   competencies




                                           1
The Role of Resource Information

   Resource information is needed to support
    the four functions of management
       Strategic management
       Planning and decision making
       Management and operational control
       Preparation of financial statements



                                                2
The Role of Resource Information

   Strategic management
       Supports choice of products, manufacturing
        methods, marketing methods, etc.

   Planning and decision making
       Supports recurring decisions such as equipment
        replacement, production scheduling, pricing,
        purchasing, etc.



                                                         3
The Role of Resource Information

   Management and operational control
       Provides feedback on operational efficiency,
        performance evaluations, etc.

   Preparation of financial statements
       Provides information on the value of inventory,
        cost of goods sold, etc.




                                                          4
Strategy Development

   Strategy determines the emphasis of cost
    management
       Strategy determines what you must do
       What you do determines the costs you must incur




                                                          5
Strategy Development

   Strategy should be built around the
    company’s core competencies
       What are we good at doing?
           Competitive advantages

       What are we not good at doing?
           Competitive disadvantages




                                          6
Strategy Development

   SWOT analysis
       Internal analysis

           Strengths
           Weaknesses
           Includes product lines, management, research and
            development, manufacturing, marketing, strategy,
            employees, brand recognition, etc.



                                                               7
Strategy Development

    External analysis

        Opportunities
        Threats
        Includes barriers to entry, intensity of competition,
         substitute products, bargaining power of customers and
         suppliers, changing demographics, government
         regulation, technological change, world events, etc.




                                                                  8
Strategy Development

   Basic strategies
       Cost leadership
           Based on having lowest delivery costs in the industry
           Low production cost
           Essential product features
           Limited product or service selection
           Quality
           Low price for customers
           Large market share

                                                                    9
Strategy Development

    Differentiation
        Based on having unique product or service
        Emphasis on innovation
        Wide product variety with different features
        Differentiating features allow for premium price
        Narrow market share




                                                            10
Strategy Development

   Confronting competition
       Developing a sustainable advantage is virtually
        impossible
           Rapid transfer of technology
           Changing consumer desires
           Actions of competitors

       Company and its strategy must be flexible to stay
        in the lead, if just temporarily

                                                            11
Strategy Development

   Areas of competition
       Cost leadership
           Cost/price
       Differentiation
           Functionality
               Features
               Time
               Status
           Quality

                            12
Strategy Development

   “Survival triplet” is constantly changing
       Must understand the customers’ desires for price,
        functionality and quality
           Position the company’s products or services within the
            survival zone          Cost/price




                   Quality                 Functionality

                                                                     13
Strategy Development

    Shape of the survival zone is determined by many
     factors
        What determines the minimum and maximum values for
            Cost
            Price
            Quality
            Functionality




                                                          14
Strategy Development

   Value chain
       Sequence of activities necessary to satisfy the
        customer

                            Assemble                    Wholesaling
Design and    Material      materials into   Final      warehousing    Retail   Customer
engineering   acquisition   components       assembly   distribution   sales    service




                                                                                     15
Strategy Development

   Value chain analysis
       Which activities present opportunities to add value
        or reduce costs?
           Activities where the company has strengths represent
            opportunities to add value
               Perform the activities internally
           Activities where the company is weak represent
            opportunities to reduce cost
               Outsource to more efficient providers

                                                                   16
Strategy Development

    Analyze linkages in the value chain for
     opportunities
        How does one activity relate to preceding or succeeding
         activities?
            For example, does providing repair service to
             customers help improve product development
             activities?




                                                               17

								
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