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