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Definition
| Theory about how to gain competitive advantages. |
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| Strategic Management Process |
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Definition
| A sequential set of analyses and choices that can increase the likelihood that a firm will choose a good strategy |
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| Written statement of missions |
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| Firms whose mission is central to all they do |
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| Specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission. |
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| A firm identifies the critical threats and opportunities in its competitive environment |
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| A firm identifies its organizational strengths and weaknesses. |
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| Corporate Level Strategies |
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Definition
| Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously |
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| When a firm adopts organizational policies and practices that are consistent with its strategy |
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Definition
| When a firm is able to create more economic value than rival firms |
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| The difference between the perceived benefits gained by a customer that purchases a firm's product or service and the full economic cost of these products or services. |
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| Temporary competitive advantage |
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Definition
| Competetive advantage that lasts for a very short period of time |
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| Sustained Competitive Advantage |
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Definition
| Competitive advantage that last a long period of time |
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| Firms that create the same economic value as their rivals |
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| Firms that generate less economic value than their rivals |
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| A measure of a firms competitive advantage calculated using information from a firm's published profit and lass balance sheet. |
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Definition
Ratios with some measure of profit in the numerator and some measure of firm size in the denominator
Ex. ROA & ROE |
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Definition
| Ratios that focus on the ability of a firm to meet its short term financial obligations |
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Definition
| Ratios that focus on the level of a firms financial flexibility including its ability to obtain more debt |
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| Ratios that focus on the level of activity in a firm's business |
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| Above Average Accounting Performance |
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Definition
| When a firms performance is greater than industry average |
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| Average Accounting Performance |
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Definition
| When a firm's performance is equal to industry average |
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| Below Average Accounting Performance |
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Definition
| When a firm's performance is worse than the industry average |
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Definition
| When a firm doesn't have stock that is traded on the public stock markets |
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Definition
| Theories about how to gain competitive advantage in an industry that emerge over time or that have been radically reshaped once they are initially implemented |
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