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| integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. |
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| a firm that formulates and implements a strategy that leads to superior performance relative to other competitors in the same industry or the industry average. |
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| the goal directed actions a firm intends to take in its quest to gain and sustain competitive advantage |
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| sustainable competitive advantage |
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| a firm that is able to outperform its competitors or the industry average over a prolonged period of time. |
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| if a firm underperforms its rivals or the industry average |
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| should 2 or more firms perform at the same level. |
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| cooperation by competitors to achieve a strategic objective |
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| the results of managers actions to influence firm performance |
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| the results attributed to the choice of industry in which to compete. |
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| Strategic business unit (SBU) |
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| a standalone division of a larger conglomerate, with its own profit-and-loss responsibility. |
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| organizational plan that details the firms competitive tactics and initiatives; in short, how the firm intends to make money. |
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| individuals or groups who can affect ot are affected by the actions of a firm |
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| a model that links three interdependent strategic management tasks-analyze, formulate, and implement-that, together, help firms conceive of and implement a strategy that can improve performance and result in competitive advantage |
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| a statement about what an organization ultimately wants to accomplish; it captures the company's aspiration. |
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| the staking out of a desired leadership position that far exceeds a companies current resources and capabilities. |
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| strategic management process |
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| method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage |
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| description of what an organization actually does-what its business is- and why it does it; can be customer-oriented or product-oriented. |
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| actions that are costly, long-term oriented, and difficult to reverse. |
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| ethical standards and norms that govern the behavior of individuals within a firm or organization |
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| strategic (long-range) planning |
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| a rational, top-down process through which management can program future success; typically concentrates strategic intelligence and decision-making responsibilities in the office of the CEO. |
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| strategy-planing activity in which managers envision different what-if scenarios to anticipate plausible futures. |
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| any unplanned strategic initiative undertaken by mid-level employees of their own volition |
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| any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures. |
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| the strategic option that managers think most closely matches reality at a given point in time. |
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| part or all of a firms strategic plan that falls by the wayside due to unexpected events. |
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| combination of intended and emergent strategy |
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| the outcome of a rational and structured top-down strategic plan. |
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| a framework that categorizes and analyzes an important set of external forces (political, economic, technological, ecological, and legal) that might impinge upon a firm. These forces are embedded in the global environment and can create both opportunities and threats for the firm. |
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| a group of companies offering similar products or services. It makes up the supply side of the market, while customers make up the demand side. |
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| structure-conduct-performance (SCP) model |
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| a framework that explains differences in industry performance. It identifies 4 different types: 1-perfect competition 2-monopolistic competition 3-oligopoly 4- monopoly. Fragmented industries tend be less profitable than consolidated one |
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| a framework proposed by Michael Porter that identifies 5 forces that determine the profit potential of an industry and shape a firms competitive strategy. |
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| a product, service or competency that adds value to the original product offering when the two are used in tandem |
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| a company that provides a good or service that leads customers to value your firms offering more when the two are combined. |
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| a process whereby formerly unrelated industries begin to satisfy the same customer need |
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| the set of companies that pursue a similar strategy within a specific industry |
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| a framework that explains firm differences in performance in the same industry by clustering different firms into groups based on a few key strategic dimensions. |
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| unique strengths embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value for the consumer or offering products and services of comparable value at lower cost. |
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| resources that do not have physical attributes and thus are invisible |
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| resources with physical attributes, which thus are visible |
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| a model that sees resources as key to superior firm performance. If a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain a competitive advantage |
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| a theoretical framework that explains and predicts firm-level competitive advantage. A firm can gain a competitive advantage if it has resources that are valuable (V), rare (R), and costly to imitate (I); the firm firm also must organize (O) to capture the value of the resources |
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| the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value. Primary activities directly adds value; support activities add value indirectly. |
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| Value chain primary activities |
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| firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain |
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| value chain support activities |
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| firm activities that add value indirectly, but are necessary to sustain primary activities. |
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| dynamic capabilities perspective |
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| a model that emphasizes a firms ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in constantly changing environment. |
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| the firms current level of intangible resources |
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| the firms level of investments to maintain or build a resource |
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| a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and T). |
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| factors to protect a competitive advantage |
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| 1- better expectations of future resource value (or simply luck) 2- path dependence 3- casual ambiguity, and 4- social complexity. If one or any combination of these conditions is present, a firm may strengthen its basis for competitive advantage, increasing its chance to be sustainable over a longer period of time. |
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| obstacles that determine how easily a firm can enter an inustry. entry barriers are often one of the most significant predictors of industry profitability |
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