The process of deciding what to do; also called strategizing

The process of performing all the activities necessary to do what has been planned.

The ways a firm goes about achieving objectives within a particular business.

Addresses three questions

1. In what businesses should we compete?
2. How can the parent company add value to the subsidiaries?
3. How can diversifying our business or entering a new industry help us compete in our other industries?

Using corporate strategy to guide the choice of which markets, including different countries, that a firm competes in.

Acronym for planning, organizing, leading, and controlling; the framework used to understand and communicate the relationship between strategy formulation and strategy implementation.

A situation where an organization's strengths cannot be easily duplicated or imitated by other firms, nor made redundant or less valuable by changes in the external environment.

The sequence of activities that a firm undertakes to create value, such as marketing, sales, and service.

The range of value-chain activities in which a firm is engaged, including the group of product and customer segments served and the array of geographic markets in which the firm competes.

Firms that pursue a cost-leadership strategy seek to make their products or services at the lowest possible cost relative to their competitors while maintaining a quality that is acceptable to consumers. Firms achieve cost leadership through a multi-pronged set of tactics, such as building large-scale operations that help them reduce the cost of each unit, eliminating extra features in their products or services, reducing their marketing costs, and finding low-cost sources or materials or labor.

A strategy to produce relatively differentiated products or services at relatively low costs.

All the activities from the gathering of raw materials to the sale of the finished product, that a business goes through to make a product.

The number of similar businesses or business activities at the same level of the value chain.

The cost advantages that a business obtains due to expansion; primarily refer to efficiencies associated with supply-side changes, such as increasing or decreasing the scale of production, of a single product type.

The cost advantages that a business obtains due to expansion, primarily refer to efficiencies associated with demand-side changes, such as increasing or decreasing the scope of marketing and distribution, of different types of products.

The number of different geographic markets in which an organization participates.

Maximizes local responsiveness by giving decentralizing decision-making authority to local business units in each country so that they can create products and services optimized to their local markets.

an international strategy in which the home office centralizes and controls decision-making authority and seeks to maximize global efficiency. 

An international strategy that combines firm-wide operating efficiencies and core competencies with local responsiveness tailored to different country circumstances and needs.

The constellation of business, corporate, and international strategy elements in terms of arenas, differentiators, vehicles, staging and pacing, and economic logic.

1. Arenas. Where will we be active?
2. Differentiators. How will we get there?
3. Vehicle. How will we win the marketplace?
4. Staging. What will be our speed and sequence of moves?
5. Economic Logic. How will we obtain our returns?

The facet of the strategy diamond that identifies the arenas in which a firm will be active, such as industry segments, geographic markets, and channel segments.

The facet of the strategy diamond that comprises features and attributes of a company's product or service that help it beat its competitors in the market.

1. Decisions must be made early. Key differentiators rarely materialize without significant up-front decisions, and without valuable differentiators firms tend to lose marketplace battles.
2. Identifying and executing successful differentiators mean making tough choices—trade-offs. Managers who can’t make tough decisions about trade-offs often end up trying to satisfy too broad a spectrum of customer needs; as a result, they execute poorly on most dimensions.

The facet of the strategy diamond that relates to the means for participating in targeted arenas, such as alliances, organic growth, or acquisition.

The facet of the strategy diamond that refers to the timing and speed of strategic moves.

The facet of the strategy diamond that refers to how a firm will earn a profit; that is, how a firm will generate positive returns over and above its cost of capital.

1. Do we need to expand outside our home country?
2. If so, where should we expand?
3. Finally, how should we do that?

The most long-range planning. typically looking three years or more into the future and setting a plan for how best to position the organization to compete effectively in the environment.

Typically has a time horizon of one to three years and specifies fairly concrete ways to implement the strategic plan.

A short-range planning (less than a year) that takes the organization-wide strategic and tactical plans and specifies concrete action steps to achieve those plans.

A management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives.

Involves decision making about the structure of an organization.

Involves decision making about the nature of jobs within the organization.

• Organizing
• Leading
• Controlling