Dr. Galbraith, Mgt 455
Labor inputs Mass production of similar items or services Long production cycles Few radical product innovations Example: Desktop Storage Rapid Process Innovation
Understanding Future Prices Managing internal costs Understanding Competitive Strategy Chalkboard discussion Future Photovoltaic Prices
Impact of experience can be quantified - empirical evidence shows that costs tend to decrease 20-30% as experience in producing a good or delivering a service doubles This relationship isn't automatic, rather it is the result of conscious actions taken by management to actively bring down costs over time As a company progresses down the Experience Curve, it should typically decrease its price point as well so as to increase its overall competitive position