Term
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Definition
Organizational
Corporate
Industry
Firm |
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Term
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Definition
| Assets, capabilities, processes, employee time, information, and knowledge that an organization controls |
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Term
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Definition
| Resources to improve organizational effectiveness and efficiency |
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Term
| Why are resources critical? |
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Definition
| they help companies create and sustain an advantage over competitors |
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Term
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Definition
| Providing greater value for customers than competitors can |
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Term
| Sustainable Competitive Adavantage |
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Definition
| A competitive advantage that other companies have tried unsuccessfully to duplicate and have for the moment stopped tryign to duplicate |
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Term
| 4 Conditions must be met if a firm's resources are to be used to achieve a sustainable competitive advantage |
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Definition
Valuable
rare
Imperfectly imitable
nonsubstitutable |
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Term
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Definition
| Allow companies to improve their effeciency and effectiveness |
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Term
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Definition
| resources that are not controlled or possessed by many competing firms, are necessary to sustain a competitive advanatge |
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Term
| Example of rare resources |
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Definition
| Apple Ipod's hard drive technology |
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Term
| Apple truly rare resources |
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Definition
| Ability to reconfigure existing technology into a package that is easy to use, elegantly designed and high in demand |
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Term
| Temporary Competitive Advantage |
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Definition
| rare and valuable resources |
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Term
| Imperfectly imitable resources |
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Definition
| resources that are impossible or extremely costly or difficult to duplicate. |
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Term
| Why has numerous attempts failed to imitate Itunes? |
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Definition
| it has capitalized on apple's reputation for developing customer friendly software, the library of music, movies, and podcasts |
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Term
| The difference between entrepreneurship and intrapreneurship is that entrepreneurship is done by start-up firms while intrapreneurship is done by existing firms. |
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Definition
True:
Both entrepreneurship and intrapreneurship involve entering entering new or established markets with new goods or services. Entrepreneurs create new businesses, while intrapreneurs branch out from existing firms into new markets. See Section 5.3 Entrepreneurship and Intrapreneurship: Entering New Markets |
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Term
| The four adaptive industry-level strategies are defenders, prospectors, analyzers, and: |
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Definition
| The fourth adaptive strategy is reactors. Reactors do not follow a consistent strategy but tend to react to changes in the external environment after they occur |
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Term
| Which of the five industry forces is a measure of the intensity of competitive behavior between companies in an industry? |
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Definition
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Term
| Which of the following is NOT a business category on the BCG matrix? |
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Definition
| The four categories of the BCG matrix are stars, question marks, dogs, and cash cows |
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Term
| Stability strategies are grand strategies in which the company: |
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Definition
| continues doing what it has been doing only better. |
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Term
| Henri Fayol was the first to identify: |
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Definition
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Term
| Contingency theory is based on the exercise of control based on the basis of knowledge. |
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Definition
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Term
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Definition
| Smaller systems that operate within the context of a larger system. |
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Term
| A product boycott is an advocacy group tactic that typically involves framing the group's concerns as public issues and creating controversy that is likely to receive extensive news coverage. |
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Definition
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Term
| Ethics training should help employees think about the consequences their choices will have on others and consider how they will choose between different solutions. |
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Definition
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Term
| Examples of a-type conflict statements would be "your idea," "our idea," "my department," or "you don't understand our situation." |
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Definition
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Term
| Stability strategies are grand strategies in which the company: |
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Definition
| continues doing what it has been doing only better. |
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Term
| Dominant designs can emerge via ________, which means that a technology becomes the dominant design simply because most people use it. |
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Definition
| independent standard bodies |
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Term
| Which of the following is NOT a method used for overcoming the problems associated with job specialization? |
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Definition
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Term
| Strong teams not only have talented members, but those talented members are also different in terms of ability, experience, or personality. |
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Definition
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Term
| Which of the following is an example of a time when it would be good to use teams? |
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Definition
| A job can't be done unless people work together. |
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Term
| Which of the following selection tests is used to measure the extent to which applicants have abilities in perceptual speed, verbal comprehension, numerical aptitude, general reasoning, and spatial aptitude? |
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Definition
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Term
| Organizational plurality has two factors: 1) all members are empowered to contribute in a way that maximizes the benefits to the organization, customers, and themselves, and 2) all members are fully informed of federal and state laws regarding equal opportunity employment |
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Definition
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Term
| According to goal-setting theory, challenging goals focus employees' attention on the critical aspects of their jobs and also energize their behavior. |
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Definition
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Term
| Osco Drugs, based in Chicago, discovered that beer and diapers tend to be bought together between 5 and 7 P.M. Oftentimes, fathers, who were told by their wives to pick up diapers on the way home from work, would pick up a case of beer for themselves. This correlation between beer and diaper purchases is a(n): |
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Definition
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Term
| Which of the following operations are typically small manufacturing operations that handle special manufacturing processes or jobs? |
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Definition
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Term
| Non-substitutable resources |
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Definition
| That no other resources can replace them and produce similar value or competitive advantage |
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Term
| Apple's history of developing customer firendly software, the innovative capabilities of the iPod, the simple pay-as-you-go sales model of iTunes,a nd the unmatched list of music and movies available for download provide customers with a service that has been valuable, rare, relatively nonsubstitutable and in the past imperfectly imitable |
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Definition
True
Application of non-substitutable |
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Term
| iTunes has retained its competitive lock on the music download business |
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Definition
| Application of Imperfectly imitable resources |
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Term
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Definition
assess the need for strategic change
conduct a situational analysis
choose strategic alternatives |
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Term
| What is the first step in creating a strategy? |
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Definition
Determining the need for strategic change.
Company needs to determine whether it needs to change its strategy to sustain a competitive edge. |
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Term
| Top-Level managers are eager and quick to change especially at successful companies |
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Definition
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Term
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Definition
| reluctance to change strategies or competitive practices that have been successful in the past. |
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Term
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Definition
| discrepancy between a company's intended strategy and the strategic actions managers take when actually implementing that strategy |
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Term
Ebay selling used and overstocked items which led to a decline in sales
They were implementing a strategy that did not work and was part of the strategic plan |
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Definition
| Application of Strategic Dissonance |
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Term
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Definition
| something that a company can make, do, or perform better than its competitors |
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Term
| An analysis of an organizations weakness often begins with an assessment of_____ |
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Definition
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Term
| Distinctive Competencies are _______ |
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Definition
tangible
product or service is cheaper, faster or better |
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Term
| What produces distinctive competence? |
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Definition
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Term
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Definition
| less visible, internal decision making routines problem solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs |
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Term
| Application of Core competencies |
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Definition
Buy in large quantities
Find great new products for its stores
Suppliers sell in higher volumes with lower prices.
Finding new products for curious consumers |
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Term
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Definition
| Using environmental scanning to identify threats and weaknesses or to find ways to improve competitive advanatge |
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Term
| Strategic groups work together |
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Definition
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Term
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Definition
| a group of other companies within an industry against which top managers compare, evaluate, and benchmark their company's strategic threats and opportunities. |
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Term
| U.S. home improvement will compete with Home depot |
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Definition
| Application of Strategic Group |
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Term
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Definition
| central companies in a strategic group |
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Term
| Why is ACE hardware not in the strategic group with Home depot? |
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Definition
| franchise structure and small individualized stores 10, 000 to 14,000 square feet with each store laid out differently |
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Term
| Application of core firms |
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Definition
most managers scan their environments for strategic threats and opportunities
they concentrate on the strategic actions of core firms |
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Term
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Definition
| Use strategies related to but somewhat different from those of core firms |
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Term
| Why does Home depot consider 84 Lumber a secondary group? |
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Definition
| 84 lumber has 265 stores in 35 states and are open to the public, but do not provide customer service to the novice nor do they carry a wide variety of items |
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Term
| Application of Secondary firms |
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Definition
| Managers need to be aware of of the potential threats and opportuniites posed by secondary firms but they usually spend more time assessing the threats and opportunites associated with core firms |
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Term
| Strategic reference point theory |
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Definition
| managers choose between two basic alternatives strategies |
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Term
| Choosing a strategy reference point theory |
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Definition
Conservative: risk avoiding strategy
Aggressive: risk-seeking strategy |
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Term
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Definition
| aims to protect an existing competitive advantage |
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Term
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Definition
| aims to extend or create a sustainable competitive advantage |
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Term
| What decides to seek risk or avoid risk? |
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Definition
| whether top management views the company as falling above or below strategic reference points |
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Term
| Strategic Reference Points |
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Definition
| Targets that managers use to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage |
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Term
Which one is more likely to risk-seeking strategy?
a company performing above reference points or below reference points |
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Definition
| Below reference points, because managers of companies see it as what do they have to lose and an external environment as opportunities for potential gain |
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Term
| Are managers stuck on risk avoiding or risk seeking? |
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Definition
| No, they adjust by actively changing and adjusting the strategic reference points they use to judge strategic performance. |
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Term
| Application of changing reference points |
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Definition
Menards is beating home depot on
price
products
sales per square foot
friendly accessibility |
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Term
| Two major approaches to corporate level strategy that companies use to decide which businesses they should be in_____ |
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Definition
portfolio strategy
grand strategies |
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Term
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Definition
| overall organizational strategy that addresses the question"What business or businesses are we in or should we be in?" |
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Term
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Definition
| owning stocks in a variety of companies in different industries, reduce risk in the overall stock portfolio |
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Term
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Definition
| corporate level strategy that minimizes risk by diversifying investments among various businesses or product lines |
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Term
| Guides the strategic decisions of corporations that compete in a variety of business |
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Definition
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Term
| Example of a related portfolio strategy |
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Definition
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Term
| Example of unrelated portfolio strategy |
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Definition
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Term
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Definition
The more business inwhich a corporation competes the smaller its overall chnaces of failing
Predicts that companies cn reduce risk even more through unrelated diversification
investing the profits and cash flows from mature slow growth business into newer business reduce long term risk |
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Term
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Definition
| Look for other companies to buy |
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Term
| Managers expand their portfolio by___ |
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Definition
develop new business internally
acquisitions |
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Term
| Unrelated diversification |
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Definition
| creating or acquiring companies in completely unrelated business |
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Term
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Definition
| portfolio strategy that managers use to categorize theri corporations business by growth and relative market share, which helps them decide how much to invest corporate funds |
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Term
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Definition
companies that have a large share of fast growing market
produce sizeable future profits |
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Term
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Definition
companies that have a small share of a fast growing market
may eventually become stars |
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Term
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Definition
companies that have a large share of a slow growing market
highly profitable |
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Term
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Definition
companies that have a small share of a slow growing market
not often profitable |
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Term
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Definition
completely different businesses are riskier than single undiversified business
dysfunctional consequences |
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Term
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Definition
| inaccurately determining outcomes fo future companies through profitability |
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Term
| best approach is to portfoliio stratagey is____ |
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Definition
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Term
| Application of related diversification |
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Definition
| Hormel foods: manufacturers and markets a variety of foods from deli meats to spam |
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Term
| Strong corporate culture promotes and encourgaes____ |
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Definition
| risk taking and innovation |
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Term
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Definition
| reduces risk becasue the different businesses can work as a team, rely on each other for needed experience, expertise, and support |
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Term
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Definition
| broad strategic plan used to help an organization achieve its strategic goals |
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Term
| Grand Strategies guide the |
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Definition
| strategic alternatives that managers of individual businesses or subunits may use in deciding what business they should be in. |
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Term
| 3 kinds of grand strategies |
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Definition
growth
stability
retrenchment/recovery |
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Term
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Definition
| increase profits, revenues, market share, or the number of places in which the company does business |
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Term
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Definition
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Term
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Definition
| directly expanding the company's existing business or creating and growing new business |
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Term
| Application of internal growth |
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Definition
| PepsiCO marketed SOBE with new bottle design and celebrity endorsements to reconnect with customers, their drinks are up 85% |
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Term
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Definition
| continue doing what the company has been doing, just doing it better |
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Term
| When do companies choose a stability strategy? |
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Definition
| When their external environment does not chnage much or after they have struggled with periods of explosive growth |
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Term
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Definition
| to turn around very poor company performance by shrnking the size or scope of the business or if a company is in multiple buisnesses, byclosing or shutting down different lines of the business |
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Term
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Definition
Significant cost reductions
recovery
successful growth strategy |
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Term
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Definition
| consists of the strategic actions that a company takes to return to a growth strategy |
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Term
| Porters 5 Industry Forces |
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Definition
Character of Rivalry
Threat of new entrants
threat of substitute or services
Bargaining power of suppliers
Bargaining power of buyers |
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Term
| What does the 5 industry forces do? |
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Definition
| Determine an industry's overall effectiveness and potential for long term profitability |
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Term
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Definition
| The stronger the industry forces the less attractive the industry becomes to corporate investors because it is more difficult to for companies to be profitable |
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Term
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Definition
| measure of the intensity of competitive behavior among companies in an industry |
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Term
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Definition
| Both industry attractiveness and profitability decrease when rivalry is cutthroat |
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Term
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Definition
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Term
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Definition
| measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry |
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Term
| Application of threat of new entrants |
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Definition
| Unilever PLC introduced a new ice cream bar (Magnum) which is a threat to Dove and Haagen-Dazs |
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Term
| Threat of substitute products or services |
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Definition
| measure of the ease with which customers can find substitutes for an industry products or services |
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Term
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Definition
| If customers can easily find substitute products or services, the competition will be greater and profits will be lower |
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Term
| Application for Substitute of products |
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Definition
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Term
| Bargaining Power of Suppliers |
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Definition
| measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs |
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Term
| Bargaining Power of Buyers |
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Definition
| measure of the influence that customers have on the firm's prices. |
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Term
| Application of bargaining power of buyers |
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Definition
| if a company sells a popular product or service to multiple buyers then the company is dependent on just prices. |
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Term
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Definition
Cost leadership
Differentation
focus strategy |
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Term
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Definition
| means producing a product or service of acceptable quality at consistently lower production costs than competitors so that the firm can offer the product or service at the lowest price in the industry |
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Term
| Examples of cost leadership |
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Definition
Protects companies from industry forces by deterring new entrants, who will match low costs and prices
Forces down the prices of substitute products and services attracts bargain seeking buyers,and increase bargaining power with suppliers who have to keep their prices low if they want to do business with the cost leader |
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Term
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Definition
| means making your products or service sufficiently different from competitors offeringgs that customers are willing to pay a premium price for the extra value or performance that it provides |
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Term
| Differentation protects___ |
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Definition
| companies from industry forces by reducing the threat of substitute products |
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Term
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Definition
| company uses either cost leadership or differentation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment |
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Term
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Definition
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Term
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Definition
Defenders
Prospectors
Analyzers
reactors |
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Term
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Definition
| seek moderate steady growth by offering a limited range of products and services to a well defined set of customers |
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Term
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Definition
| Aggressively defend their current strategic position by doing the best job they can to hold onto customers in a particular market segment. |
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Term
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Definition
| seek fast growth by searching for new market opportunities, encouraging risk taking and being the first to bring innovative new products to market |
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Term
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Definition
| blend of the defender and prospector strategies |
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Term
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Definition
seek moderate steady growth and limited opportunities for fast growth
rarely first to market |
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Term
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Definition
do not follow a consistent strategy
unstable
react to external environment |
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Term
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Definition
The basics of direct competition
strategic moves involved in direct competition between companies |
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Term
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Definition
| address the question: how should we compete against a particular firm? |
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Term
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Definition
Market commonality
Resource similarity |
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Term
| Direct Competition Definition |
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Definition
| rivalry between two companies offering similar products and services that acknowledge each other as rivals and take offensive and defensive positions as they act and react to each other's strategic actions |
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Term
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Definition
Degree to which two companies have overlapping products, services or customers in multiple markets
the more markets the more intense competition |
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Term
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Definition
| extent to which a competitor has similar amounts and kinds of resources that is similar assets, capabilities, processes, information, and knowledge used to to create and sustain an advantage over competitors |
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Term
| Resource Similarity Competitive standpoint |
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Definition
| that your direct competitors can probably match the strategic actions that your company takes. |
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Term
| Strategic moves of direct competition |
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Definition
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Term
| Corporate level strategies |
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Definition
| help managers decide what business to be in |
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Term
| Industry level strategies help |
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Definition
| determine how to compete within an industry |
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Term
| Firm level strategies help |
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Definition
| managers determine when, where, and what strategic actions should be taken against a direct competitor |
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Term
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Definition
| competitive move designed to reduce a rivals market share of profits |
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Term
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Definition
| counter move prompted by a rival's attack that is designed to defend or improve a company's market share or profit |
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Term
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Definition
match
mirror your competitors move |
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