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MGMT 466 - Ch 1
Strategic Management and Strategic Competitiveness
38
Management
Undergraduate 4
09/22/2009

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Term
strategic competitiveness
Definition
__ is achieved when a firm successfully formulates and implements a value-creating strategy
Term
strategy
Definition
a __ is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. This indicates what a firm intends (and does not intend) to do.
Term
competitive advantage
Definition
a firm has a __ when it implements a strategy competitors are unable to duplicate or find too costly to try and imitate. never permenant
Term
above-average returns
Definition
returns in excess of what an investor expects to earn from other investments with a similar amount of risk
Term
risk
Definition
__ is an investor's uncertainty about the economic gains or losses that will result from a particular investment
Term
average returns
Definition
__ are returns equal to those an investor expects to earn from other investments with a similar amount of risk
Term
strategic management process
Definition
the __ is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns
Term
1. analyze the firm's external and internal environments to determine its resources, capabilities, and core competencies (the sources of its "strategic inputs"). 2. develop firm's vision and mission and formulates its strategy 3. to implement the strategy, the firm takes actions toward achieving strategic competitiveness and above-average returns
Definition
3 steps of the strategic management process
Term
hypercompetition
Definition
under conditions of __, assumptions of market stability are replaced by notions of inherent instability and change. it results from the dynamics of strategic maneuvering among global and innovative combatants. it is a condition of rapidly escalating competition based on price-quality positioning, competition to create new know-how and establish first-mover advantage, and competition to protect or invade established product or geographic markets
Term
1. global economy 2. rapid technological change (technology)
Definition
2 drivers of a hypercompetitive environment
Term
global economy
Definition
__ is one which goods, services, people, skills, and ideas move freely across geographic borders.
Term
globalization
Definition
__ is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders
Term
1. leads to higher-quality g&s (toyota) 2. leads to higher levels of performance standards (quality, cost, productivity, product intro time, and operational efficiency) in many competitive dimensions
Definition
2 things affected by globalization
Term
the amount of time typically required for a firm to learn how to compete in markets that are new to them
Definition
one risk of entering the global market
Term
technology diffusion
Definition
__ is the speed at which new technologies become available and are used
Term
perpetual innovation
Definition
__ is a term used to describe how rapidly and consistently new, information-sensitive technologies replace older ones
Term
disruptive technologies
Definition
technologies that destroy the value of an existing technology and create new markets
Term
strategic flexibility
Definition
__ is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment
Term
I/O model of above average returns
Definition
this model explains the external environment's dominant influence on a firm's strategic actions. it specifies that the industry in which a company chooses to compete has a stronger influence on performance than do the choices managers make inside their organizations. the firm's performance is determined by economies of scale, barriers to market entry, diversification, product differentiation, and the degree of concentration of firms in the industry
Term
1. the external environment imposes pressures and constraints that determine the strategies that would result in above-average returns 2. most firms competing within an industry control similar strategically relevant resources and pursue similar strategies in light of those resources 3. resources used to implement strategies are highly mobile across firms 4. organizational decision-makers are rational and act in the firm's best interests
Definition
4 assumptions of the I/O model of AAR
Term
1. study external environment 2. locate an industry for high AAR potential 3. identify the strategy needed for AAR 4. develop or acquire assets/skills needed 5. use the assets/skills to implement strategy
Definition
5 steps for I/O model for AAR
Term
resourced-based model of AAR
Definition
the __ assumes that each organization is a collection of unique resources and capabilities
Term
resources
Definition
__ are inputs into a firm's production process (resource-based model)
Term
capability
Definition
__ is the capacity for a set of resources to perform a task or activity in an integrative manner (RB model)
Term
core competencies
Definition
__ are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals
Term
1. only two strategies are suggested (cost leadership and differentiation) 2. internal resources and capabilities not considered
Definition
2 limitations of the I/O model
Term
1. identify firm's resources and study its strengths and weaknesses relative to competitors 2. determine firm's capabilities 3. determine the potential of the firm's resources and capabilities (competitive advantage) 4. locate an attractive industry 5. select strategy that best allows firm to utilize its resources and capabilities relative to external environment
Definition
5 steps of RB model of AAR
Term
1. a firm's unique internal resources and capabilities are the basis for firm strategy and AAR 2. each firm's performance difference across time emerges 3. combined uniqueness should define the firms' strategic actions 4. resources are tangible and intangible
Definition
4 basic assumptions of RB model of AAR
Term
vision
Definition
__ is a picture of what hte firm wants to be and ultimately achieve. __ also reflects a firm's values and aspirations and captures the heart and mind of each employee
Term
mission
Definition
__ specifies the business(es) in which the firm intends to compete and the customers it intends to serve. the __ is more concrete than the vision
Term
stakeholders
Definition
__ are the individuals and groups who can affect the vision and mission of a firm, are affected by the strategic outcomes achieved, and have enforceable claims on a firm's performance
Term
shareholder
Definition
individuals who have invested capital in a firm
Term
capital market stakeholders
Definition
shareholders and lenders are __ stakeholders
Term
product market stakeholders
Definition
customers, suppliers, host communities, and unions are __ stakeholders
Term
organizational stakeholders
Definition
employees are __ stakeholders
Term
strategic leaders
Definition
__ are people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission
Term
organizational culture
Definition
__ refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business
Term
profit pool
Definition
a __ entails the total profits earned in an industry at all points along the value chain
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