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THE DIFF./LOW-COST TRADEOFF Efficiency frontier Shows all the positions a
company can adopt with regard to differentiation and low
cost. Has a convex shape because of diminishing returns. Multiple positions on the differentiation-low cost continuum are viable. Have enough demand to support an offering.
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THE DIFF./LOW-COST TRADEOFF To get to the efficiency frontier,
a company must: pursue the right functional-level strategies. be properly organized. ensure
its business-level strategy, functional-level strategy, and organizational arrangement align with each other.
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VALUE INNOVATION Occurs when innovations push out the efficiency
frontier in an industry, enabling greater value to be
offered through superior differentiation. At a lower cost than was thought possible. Enable a company to outperform its rivals for a long period of time.