MT1: The first concept I learned this week was the learning curve and how it impacts strategy. Carpenter and Sanders (2008) explain the learning curve as when, ?Incremental production costs decline at a constant rate as production experience is gained; the steeper the learning curve, the more rapidly costs decline.? (p. 142). The learning curve can be a strong advantage because it incorporates a firm?s established knowledge and best practices and can be used as a leg up over competitors. Once a firm has established efficient processes and practices around production, it can become more efficient at keeping costs low. Keeping costs low can help a firm gain more market share (Carpenter & Sanders, 2008). Firms that are willing to expand their knowledge base and improve practices while exploring new ways to improve internally hold a competitive advantage over others (Rose-Anderssen, Baldwin, Ridgeway, Allen & Varga, 2009). Companies like Apple and Amazon utilize the learning curve to efficiently produce products, keep costs low, and be more profitable in the process.MT2: The second concept I learned this week was the three drivers that threaten low cost advantages for firms. There is the technological threat, which is when new technologies that provide competitive advantage to a firm can be imitated, threating the firms? ability to compete and lead the market in innovation (Carpenter & Sanders, 2008). Quality and competitive pricing is also a threat to low-cost leaders (Carpenter & Sanders, 2008). ?A real threat to an intended low-cost position is the failure to offer sufficient quality to satisfy buyers? basic needs.? (Carpenter & Sanders, 2008, p. 149). And third, is following ethical business practices that can impact how a firm competes in the low cost arena. The threat that stood out to me the most was quality and competitive pricing. Customers value not just quality products, but also the experience when buying a product or service (Monica & Ramanaiah, 2018). So while a firm can focus on offering competitive pricing to differentiate from competitors, providing a quality customer experience can also set a firm apart and be a leading differentiator. A firm must keep these three threats in mind when running a low-cost operation.MT3: The third concept I learned this week was the various stages in an industry life cycle. There are four main phases in an industry life cycle: embryonic, growth, mature, and decline (Carpenter & Sanders, 2008). Each stage influences how a firm strategically positions itself in an industry, particularly because each stage holds various factors that impact who the competitors are, any barriers to entry, the key differentiators, alliances, pricing, and globalization (Carpenter & Sanders, 2008). The streaming device industry is a great example to use when assessing how a firm competes in the various stages. Ten years ago the streaming device industry was in the embryonic stage. The industry was new, with minimal competitors and was just starting to be figured out. Fast-forward to ten years later and the industry is in a more mature stage. Cable companies who once dominated the entertainment market are now struggling to find their competitive position. The industry life cycle stage dictates how a firm competes, allocates resources and capabilities, invests in new product development projects, and ultimately operates in the competing arenas. It?s important for a firm to understand where their product or service fits according to the stages.Carpenter, M. A., & Sanders, W. G. (2008). Strategic management: A dynamic perspective. Upper Saddle River, NJ: Pearson Prentice Hall.Monica, M., & Ramanaiah, G. (2018). Service quality measurement at brand factory: An empirical study. Management and Labour Studies, 43(1&2), 1-8. doi: https://doi.org/10.1177/0258042X17749650Rose-Anderssen, C., Baldwin, J. S., Ridgway, K., Allen, P. M., & Varga, L. (2009). Knowledge transformation, learning and changes giving competitive advantage in aerospace supply chains. Emergence: Complexity and Organization, 11(2), 15. Retrieved from http://link.galegroup.com.library2.csumb.edu:2048/…
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