M1A3 Capstone

Key Concepts in this Module

The following are some of the key concepts that will be covered in this module:

· Market position is predicated on the identification of a specific niche or focus. This activity of finding a market niche will enable a product to compete successfully.

· Value proposition is the aspect that entices the buyer or consumer to understand the “worthwhileness” of a given product or service.

· Differentiation or competitive advantage is how a product or service separates itself from the competition in the marketplace, that is, how the product or service is different, better, or unique.

· Strategic fit is defined as making sure all the elements of the business come together internally as well as externally. This is used to assess whether it makes sense for a given organization to be in the line of business it is in and offer the services and products that it does. The viability of aligning products, services, mission, or market niche comes together to provide opportunity for growth and to support the business direction and goals.

· Generic strategies focus on cost differentiation (when the product or service offers something a little more unique or different than the competition), cost leadership (lower cost leader in the industry given a set quality), and strategy focus (this effort narrows the playing field or market segment and also offers some differentiation, possibly in cost).

· Vertical integration (supply chain) is often referred to as the degree to which a firm owns its upstream suppliers and its downstream buyers. This often influences corporate strategy because a focused vertical integration approach can significantly impact cost as well as the ability to differentiate.

· Diversification (horizontal integration) allows businesses to add to their existing suite of products, services, and even markets. Most often, the purpose is to allow the company to enter lines of business that are related but new. However, diversification can also be completely different from current operations.

· Outsourcing involves contracting with another business or person to perform specific business functions. For example, many companies outsource their payroll function to a firm to process, manage, and distribute paychecks. Some smaller firms may have an outsourced chief financial officer (CFO). They may not need someone full time, but still need the skills or expertise a CFO can provide on a part-time and contractual basis.

· Timing refers to the two old adages—“timing is everything” and “be in the right place at the right time.” Most likely these were coined by business people, as they understand that timing is key. 

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