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Business level strategy
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The goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.
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strategic-trade off
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Choices between a cost or value position. Such choices are necessary because higher value creation tends to generate higher cost.
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Differentiation
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Generic business strategy that seeks to create higher value for customers than the value that competitors create, while containing costs.
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cost leadership
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Generic business strategy that seeks to create the same or similar value for customers at a lower cost.
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scope of competition
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The size—narrow or broad—of the market in which a firm chooses to compete.
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focused cost leadership
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Same as the cost-leadership strategy except with a narrow focus on a niche market.
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focused differentiation strategy
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same as the differentiation strategy except with a narrow focus on a niche market
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economies of scope
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Savings that come from producing two (or more) outputs at less cost than producing each output individually, despite using the same resources and technology.
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economies of scale
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Decreases in cost per unit as output increases.
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minimum efficient scale
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Output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.
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diseconomies of scale
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Increases in cost per unit when output increases.
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blue ocean
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Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs.
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value innovation
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The simultaneous pursuit of differentiation and low cost in a way that creates a leap in value for both the firm and the consumers; considered a cornerstone of blue ocean strategy.
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value curve
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Horizontal connection of the points of each value on the strategy canvas that helps strategic leaders diagnose and determine courses of action.
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strategy canvas
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Graphical depiction of a company's relative performance vis-à-vis its competitors across the industry's key success factors.
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