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Harrison College MGT2000
Vocabulary - Chapter 6
51
Business
Undergraduate 1
05/05/2016

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Term
Resources
Definition
the assets, capabilities, processes, employee time, information, and knowledge that an organization uses to improve its effectiveness and efficiency and create and sustain competitive advantage
Term
Competitive advantage
Definition
providing greater value for customers than competitors can
Term
Sustainable competitive advantage
Definition
a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate
Term
Valuable resource
Definition
a resource that allows companies to improve efficiency and effectiveness
Term
Rare resource
Definition
a resource that is not controlled or possessed by many competing firms
Term
Imperfectly imitable resource
Definition
a resource that is impossible or extremely costly or difficult for other firms to duplicate
Term
Nonsubstitutable resource
Definition
a resource that produces value or competitive advantage and has no equivalent substitutes or replacements
Term
Competitive inertia
Definition
a reluctance to change strategies or competitive practices that have been successful in the past
Term
Strategic dissonance
Definition
a discrepancy between a company's intended strategy and the strategic actions managers take when implementing that strategy
Term
Situational (SWOT) analysis
Definition
an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment
Term
Distinctive competence
Definition
what a company can make, do, or perform better than its competitors
Term
Core capabilities
Definition
the internal decision making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs
Term
Shadow-strategy task force
Definition
a committee within a company that analyzes the company's own weaknesses to determine how competitors could exploit them for competitive advantage
Term
Strategic group
Definition
a group of companies within an industry against which top managers compare, evaluate, and benchmark strategic threats and opportunities
Term
Secondary firms
Definition
the firms in a strategic group that follow strategies related to but somewhat different from those of the core firms
Term
Strategic reference points
Definition
the strategic targets managers use to measure whether a firm has developed the core competencies it needs to achieve a sustainable competitive strategy
Term
Corporate-level strategy
Definition
the overall organizational strategy that addresses the question "What business or businesses are we in or should we be in?"
Term
Diversification
Definition
a strategy for reducing risk by buying a variety of items (stocks or, in the case of a corporation, types of businesses) so that the failure of one stock or one business does not doom the entire portfolio
Term
Portfolio strategy
Definition
a corporate-level strategy that minimizes risk by diversifying investment among various business product lines
Term
Acquisition
Definition
the purchase of a company by another company
Term
Unrelated diversification
Definition
creating or acquiring companies in completely unrelated businesses
Term
BCG matrix
Definition
a portfolio strategy developed by the Boston Consulting Group that categorizes a corporation's businesses by growth rate and relative market share and helps managers decide how to invest corporate funds
Term
Star
Definition
a company with a large share of fast-growing market
Term
Question mark
Definition
a company with a small share of fast-growing market
Term
Cash cow
Definition
a company with a large share of a slow-growing market
Term
Dog
Definition
a company with a small share of a slow-growing market
Term
Related diversification
Definition
creating or acquiring companies that share similar products, manufacturing, marketing, technology, or cultures
Term
Grand strategy
Definition
a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use
Term
Growth strategy
Definition
a strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business
Term
Stability strategy
Definition
a strategy that focuses on improving the way in which the company sells the same products or services to the same customers
Term
Retrenchment strategy
Definition
a strategy that focuses on turning around very poor company performance by shrinking the size or scope of the business
Term
Recovery
Definition
the strategic actions taken after retrenchment to return to a growth strategy
Term
Industry-level strategy
Definition
a corporate strategy that addresses the question "How should we compete in this industry?"
Term
Character of the rivalry
Definition
a measure of the intensity of competitive behavior between companies in an industry
Term
Threat of new entrants
Definition
a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry
Term
Threat of substitute products or services
Definition
a measure of the ease with which customers can find substitutes for an industry's products or services
Term
Bargaining power of suppliers
Definition
a measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs
Term
Bargaining power of buyers
Definition
a measure of the influence that customers have on the firm's prices
Term
Cost leadership
Definition
the positioning strategy of producing a product or service of acceptable quality at consistently lower production costs than competitors can, so that the firm can offer the product or service at the lowest price in the industry
Term
Differentiation
Definition
the positioning strategy of providing a product or service that is sufficiently different from competitors' offerings that customers are willing to pay a premium price for it
Term
Focus strategy
Definition
the positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment
Term
Defenders
Definition
companies using an adaptive strategy aimed at defending strategic positions by seeking moderate, steady growth and by offering a limited range of high-quality products and services to a well-defined set of customers
Term
Prospectors
Definition
companies using an adaptive strategy that seeks fast growth by searching for new market opportunities, encouraging risk taking, and being the first to bring innovative new products to market
Term
Analyzers
Definition
companies using an adaptive strategy that seeks to minimize risk and maximize profits by following or imitating proven successes of prospectors
Term
Reactors
Definition
companies that do not follow a consistent adaptive strategy but instead react to changes in the external environment after they occur
Term
Firm-level strategy
Definition
a corporate strategy that addresses the question "How should we compete against a particular firm?"
Term
Direct competition
Definition
the rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each other's strategic actions
Term
Market commonality
Definition
the degree to which two companies have overlapping products, services, or customers in multiple markets
Term
Resource similarity
Definition
the extent to which a competitor has similar amounts and kinds of resources
Term
Attack
Definition
a competitive move designed to reduce a rival's market share or profits
Term
Response
Definition
a competitive countermove, prompted by a rival's attack, to defend or improve a company's market share or profit
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