Term
| Stratigic Competitiveness |
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Definition
| is achieved when a firm sucessfully formulates and implements a value-creating strategy. |
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| is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage. |
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| when it implements a strategy that creates superior value for customers and that its competitors are unable to duplicate or find too costly to imitate. |
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| Strategic Intent (or vision) |
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Definition
| Leveraging of a firm's internal resources and capabilities to accomplish what at first appear to be unattainable goals. |
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Definition
| are returns in excess of what an investor expects to earn from other investments with similar amount of risk. |
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Term
| According to the Industrial Organization (I/O) model, what determines above average returns? |
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Definition
Model suggests that above average returns are largely determined by characteristics outdside the firm (industry structure and external enviornment) rather than characteristics inside the firm (internal enviornment).
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Term
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Definition
| is an investr's uncertainty about the economic gains or losses that will result from a partucular investment |
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| are returns equal to those an investor expects to earn from other investments with similar amount of risk |
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Term
| Stratigic Management Process |
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Definition
| is the full set if commitment decisions and actions required for a firm to achieve stratigic competitiveness and earn above average returns. |
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Term
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Definition
| is one in which goods, services, people, skill and ideas move freely across geographic boarders. Relatively unfetterd by artificial constraints, such as tariffs, the global economy significantly expands and complicates a firm's competitive environment. |
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Term
What are the 4 underlying assumptions of the Industrial Organization (I/O) model?
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Definition
1. Most firms competing in an industry control similar sets of strategically relevant resources. (example. ford, nissan, honda ect...)
2. Resources used to implement strategies are highly mobile across firms. They are perfectly tradeable! This means that anything that a competitor has I am able to buy. No long lasting differences or competitive advantages across firms.
3. The external enviornment determines the strategies that will result on above-average returns
4. Organizational decision makers are assumed to have profit-maximizing behaviors. Rational thinking. |
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Term
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Definition
| is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowldge across country boarders. |
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| used to describe how rapidly and consistently new, information intensive technologies replace older ones. |
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| is the speed at which new technology becomes available and are used. |
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Definition
| technologies that destroy the value of an existing technology and create new markets - surface frequently in today's competitive markets. |
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Term
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Definition
| is gained through experience, observation, and inherence and is an intangible resource. The value of an intangible resources, including knowledge, is growing as a proportion of total shareholder value in today's competitive landscape. |
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Term
What is the I/O model for earning above average returns? (6 steps)
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Definition
1. Study the External Enviornment
-- general enviornment
--industry enviornment
--competitive enviornment
2. Attractive Industry (Most Important*)
--an industry whose structural characteristics suggest above average returns are possible.
--Means there are opportunities for advancement
3. Strategy Formulation
--Selection of a strategy linked with above-average returns in the particular industry.
4. Devolop or acquire Assets & Skills
--Assets and skills required to implement a chosen strategy
5. Strategy Implemntation
--Use the firms's strengths (its decoloped or acquired assets and skills) to implement the strategy.
6. Superior Returns
--Earning of above-average returns
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Definition
| is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive invironment. |
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Definition
| are inputs into a firm's production process, such as capital equipment, the skill of individual employees, patents, finances, and talented managers. |
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Definition
| is the capacity for a set of resources to perform a task or an activity in an interative manner. Capabilities evolve over time and must be managed dynamically in pursuit of above average returns. |
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Definition
| are resources and capabilites that serve as a source of competitive advantage for a firm over its rivals. |
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Term
| Capital Market stakeholders |
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Definition
-shareholders
-major suppliers of capital (banks) |
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Term
| Product Market Stakeholders |
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Definition
- primary customers
- suppliers
- host communities
- unions
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Term
| Organizational Stakeholders |
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Definition
- employees
- managers
- nonmanagers
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Definition
| are people located in different areas and levels of the firm using the strategic management process to select strategic actions that help the firm acheive its vision and fulfill the mission |
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Definition
| entails the total profits earned in an industry at all points along the value chain. |
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Term
| four step to indentifying profit pools: |
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Definition
- define the pool's boundaries
- estimate the pools overall size
- setimate the size of the value chain activity in the pool
- reconcile the calculations
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Term
What determines above-average returns for the Resource-Based Model?
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Definition
Resource-based model sugests that above-average returns are determined by characteristics inside the firm.
It focuses on devoloping and obtaining valuable resources and capabilities which are difficult or impossible for rivals to imitate; CORE COMPENTICIES |
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Term
What are the assumptions of the Resource-based Model? (3 assumptions) |
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Definition
1. Each firm is a collection if unique resources and capabilities (core competencies) rather than their structural characteristics.(example. nissan, honda, and hyundai all have uniqie resources. [unlike I/O model])
2. Resources may NOT be highly mobile across firms, so that differences in resource endowment persist. (We assume there are long-term competitive advantages across firms in our industry)
3. Resources that are not mobile have to be devoloped internally over time.
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Term
What is the Resource-based model of superior returns? (6 steps to achieve above-average returns)
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Definition
1. Identify the firms resources
--strengths and weaknessess compared with competitors
2. Assess the firms capabilities
--tasks or activities that it performs better than its competitors
3. Determine resource and capabilites that form Competitive Advantage
--abililty of a firm to outperform its rivals
4. Locate an Attractive Industry
--an industry with opportunities that can be exploited by the firms resources and capabilities. Move our core competencies that give us a competitive advantage to other industries.
5. Strategy formulation and implementation
--utalize resources and capabilities relative to oppotrunities in the external enviornment
6. Above-average returns!
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Term
| What is vertical competition and horizontal competition? |
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Definition
Vertical Competition is Sales Wars. Includes threat of new entrants and threat of substitute products.
Horizontal Competition--buyers and suppliers trying to steal profits. Includes the bargaining power of buyers/suppliers |
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