Experience Curve etc

Report
Business
Growth Rate
Relative Position
(Market Share)
Low
High
High
Low
Learn about BCG Matrix at http://www.valuebasedmanagement.net/methods_bcgmatrix.html
Why Technology?
Technology has been significantly changing our lifestyle and living environment steadily since the
1970s.
IBM’s recent global study of CEOs, “Enterprise of the
Future”, found that, at its core, the enterprise of the
future is …
Hungry for change;
Innovative, beyond customer imagination;
Globally integrated;
Disruptive by nature; and
Genuine, not just generous.
The complex nature of business and the flattening of
business processes and strategies are forcing critical
reliance on technology.
Average unit price of Ford
Model T (in 1958$)
The experience of the Ford Motor Company from
1908 to 1923 illustrates how experience curve
strategy can cause a firm to focus obsessively
on costs and thus fail to innovate ending up
with an
increasingly
obsolete
product.
Source:
W.J. Abernathy &
K. Wayne: “Limits
of the Learning
Curve”, Harvard
Business Review,
Sept-Oct 1974
Cumulative units produced
The VALS 2TM classification of eight
American lifestyles*
ACTUALIZERS
Principle oriented
Status
oriented
Abundant
resources
Action oriented
FULFILLEDS
ACHIEVERS
EXPERIENCERS
BELIEVERS
STRIVERS
MAKERS
STRUGGLERS
Minimal
resources
*Martha Farneworth Riche: “Psychographics for the 1990s” American Demographics, July 1989, p. 24-25
Broad target
Narrow target
Competitive Scope
Competitive Advantage
Lower cost
Differentiation
Cost
Leadership
Differentiation
Cost
Focus
Focussed
Differentiation
Porter’s
generic
competitive
strategies
Michael Porter:
The Comparative
Advantage of
Nations (The Free
Press, New York,
1990)

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