Term
| What is competitive advantage? |
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Definition
| industry vs. firm effects in determining firm performance - A firm that achieves superior performance relative to other competitors in the same industry or the industry average |
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Definition
| an integrative management field that combines analysis formulation and implementation in the quest for competitive advantage |
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| A set of goal-directed actions a firm takes to gain and sustain superior performance relaive to competitors |
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| Elements of a good strategy |
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Definition
| Analysis, Formulation, Implementation |
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Definition
| Diagnosis of he competitive advantage - Accomplished through strategy analysis of the firm's internal and external environments |
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Definition
| Guiding policy to address the competitive advantage - Accomplished through strategy formulation, resulting in the firm's corporate, busiess, and functional strategies |
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Definition
| A set of coherent actions to implement the firm's guiding policy - Accomplished through strategy implementation |
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| Sustainable Competitive Advantage |
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Definition
| Outperforming competitors or the industry average over a prolonged period of time |
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Definition
| Underperformance relative to other competitors in the same industry or the industry average |
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Definition
| Performance of two or more firms at the same level |
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Term
| Rewards of superior Value Creation |
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Definition
| Profitability and Market share |
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Term
| Firm effects v industry effects in determining firm performance |
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Definition
A firm's performace is more closely related to its managers' actions (firm effects) than to the external circumstances surrounding it (industry effects)
- They are interdependent and relevant in determining firm performance |
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Term
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Definition
| Individuals or groups that have a claim or interest in the performance and continued survival of the firm. They make specific contributions for which they expect rewards in return. |
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Term
| Internal Stakeholders include... |
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Definition
| Stockholders, Employees, and board members |
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Term
| External Stakeholders include... |
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Definition
| customers, suppliers, alliance partners, creditors, unions, communities, and governments at various levels |
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Term
| The effective management of stakeholders |
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Definition
| the organization, groups or individals that can materially affect or are affected by the action of a firm is necessary to ensure the continued survival of the firm and to sustain any competitive advantage |
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Term
| Stakeholder impact analysis |
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Definition
considers the needs of different stakeholders, which process enables the firm to perform optimally and to live up to the expectations of good citizenship
PAY ATTENTION TO: Power, legitimacy, and urgency |
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Term
| 5-step process for stakeholder analysis |
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Definition
1. Who are our stakeholders?
2. What are our stakeholders' interests and claims?
3. What opportunities and threats do our stakeholders present?
4. What economic, legal, and ethical responsibilities do we have to our stokeholders?
5. What should we do to effectively address the stakeholder concerns? |
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Term
| Corporate Social Responsibility |
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Definition
| A framework to recognize and address economic, legal social, and philanthropic expectations |
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Term
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Definition
| Describes the high impact of a highly improbably event |
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Definition
| Firm performance is attributed to managerial actions |
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Term
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Definition
Describe the underlying economic structure of the industry
- Determined by elements common to all industries |
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Term
| Key to successful strategy |
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Definition
| Combine activities for a unique position in an industry |
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Term
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Definition
A model that links three interdependent strategic management tasks
- Analyze (external and internal environments)
- Formulate (appropriate business and corporate strategy)
- Implement (through structure, culture and controls) |
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Definition
Helps managers achieve their strategic objectives more effectively
- uses internal and eternal performance metrics
- Balances both financial and strategic goals |
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Definition
Detils the competitive tactics and initiatives
-Explains how the firm intends to make money
- How the firm does business |
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Term
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Definition
| The difference between what you would have been wiling to pay (V) and what you paid (P) |
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Definition
The difference between:
- A buyer's willingness to pay for a product/service and the firm's total cost to produce it.
-The difference between value and cost |
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Definition
| Dollar value of total shares outstanding |
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Definition
| The value of the best foregone alternative use of the resources employed |
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| Producer surplus (profit) |
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Definition
| The difference between the price charged (P) and the cost to produce (C) |
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Term
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Definition
Money provided for an equity share in a company
- Can't be recovered if firm goes bankrupt |
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Term
| Shareholders (Value creation) |
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Definition
Own one or more shares of stock in a company
- the legal owners of public companies |
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Definition
| Balance between planet, people, and profits |
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| Total return to shareholders |
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Definition
| Stock price appreciation plus dividends |
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Definition
Profits: The economic dimension
People: The social dimension
Planet: The ecological dimension |
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Term
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Definition
| The value of a good in the eyes of consumers changes based on income, preferences, time, and oher factors |
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Term
| Balanced Scorecard Advantages |
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Definition
Link strategic vision to responsible parties
- Translate the vision into measurable goals
- DEsign and plan business processes |
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Term
| Balanced Scorecard Disadvantages |
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Definition
Focused on strategy implementation
- Limited guidance about which metrics to use
- Only as useful as the managers apply it
- Strategy must be translated into measurable objectives |
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Term
| Competitve industry structure |
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Definition
- number and size of competitors
- the firms' degree of pricing power
- The type of product or service
- The height of entry barriers |
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Term
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Definition
-Economies of scale
-network effects
- customer switching costs
- capital requirements
- Advantages independent of size
- Government policy
- Credible threat of retaliation |
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Term
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Definition
Affects intensity of rivalry among competitors
- Obstacles that determine how easily a firm can leave that industry |
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Definition
| threat of entry, power of suppliers, power of buyers, threat of substitututes, rivalry among existing competitors |
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Definition
| A method to identify a industry's profit potential |
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Definition
When unrelated industries satisfy the same need
EX: Content providers adapting |
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Term
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Definition
| A firm's strategic profils baserd on value creation and cost |
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Term
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Definition
The risk that potential competitors will enter an industry
- Lowers indusry profit potential |
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Term
| Competitve industry structure |
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Definition
- number and size of competitors
- the firms' degree of pricing power
- The type of product or service
- The height of entry barriers |
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Term
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Definition
-Economies of scale
-network effects
- customer switching costs
- capital requirements
- Advantages independent of size
- Government policy
- Credible threat of retaliation |
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Term
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Definition
Affects intensity of rivalry among competitors
- Obstacles that determine how easily a firm can leave that industry |
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Term
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Definition
| threat of entry, power of suppliers, power of buyers, threat of substitututes, rivalry among existing competitors |
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Term
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Definition
| A method to identify a industry's profit potential |
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Term
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Definition
When unrelated industries satisfy the same need
EX: Content providers adapting |
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Term
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Definition
| A firm's strategic profils baserd on value creation and cost |
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Term
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Definition
The risk that potential competitors will enter an industry
- Lowers indusry profit potential |
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Term
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Definition
| unique, deeply embedded, firm-specific strengths that allow companies to differentiate their producs ans services |
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Term
| Resource based view assumptions |
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Definition
resource heterogeneity
Resource immobility |
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Term
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Definition
| Valuable, Rare, costly to Imitate, able to Organize |
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Term
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Definition
| describes the internal activities a firm engages in when transforming inputs into outputs |
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