Differentiation Efficiency Customer responsiveness Quality Innovation Higher prices Lower costs New...
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Transcript of Differentiation Efficiency Customer responsiveness Quality Innovation Higher prices Lower costs New...
Differentiation
Efficiency
Customer responsiveness
Quality Innovation
Higher prices
Lower costs
New productsImproved
Product
PC
V
Profit
Greater value…
►Quality• Closer to customer needs• Customer focus• Cross functional integration
• Greater value
• Higher prices• Supplier relationships
…Higher prices
Lower costs
PROFIT
Efficiency
Innovation
Quality
Customer responsiveness
V P C
Higher customer value and prices
Improving the product/service ( => greater customer responsiveness)
► Manufacturing/Production • Raise quality -> increase in
value► Sales and Marketing
• Market segmentation• Tailor product to segments’
needs► Customer Service
• The product’s success (and the company reputation) depend on quality of the service as well as that of the product
► HR• Training
► E.g. Call centre staff
► IT• CAD/CAM
► Increase product variety
► Better able to meet segment needs
• Customer support ► Customer relationship
management software
Cost leadership
Efficiency
Customer responsiveness
Quality Innovation
Higher prices
Profit
Newprocesses
Fewer defects
Lower costs
New products
ImprovedProduct
V
PC
Reducing costs (greater efficiency)
► Manufacturing/Production • Economies of scale
► Spreading of fixed costs► Specialization
• Learning effects► More applicable to complex
operations► Purchasing
• JIT (less inventory)• Supplier relationships
► Marketing• Reputation, word of mouth• Penetration• Defection rates
► HR• Training• Self managing teams• Incentives
► IT• EDI
► JIT, data entry
• Customer support ► (e.g. FAQs, expert
systems for problem diagnostics
► Call centre management