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Definition
| the actions managers take in their quest for competitive advantage when competing in a single product market |
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| a firms strategic profile based on value creation and cost. The goal is to create as large a gap as possible between the value the firms product or service creates and the cost required to produce it (V-C) |
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| situations that require choosing between a cost or value position, necessary because higher value tends to require higher cost |
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| generic business strategy that seeks to create higher value for customers than the value for customers than the value that competitors create, by delivering products or services with unique features while keeping the firms cost structure at the same or similar levels. |
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| generic business strategy that seeks to create the same or similar value for customers by delivering products or services at a lower cost that competitors, enabling the firm to offer lower prices to its customers. |
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| the size- narrow or broad- of the market in which a firm chooses to compete. |
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| focused cost-leadership strategy |
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| same as the cost-leadership strategy except with a narrow focus o a niche market |
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| focused differentiation strategy |
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Definition
| same as the differentiation strategy except with a narrow focus on a niche market |
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| the manufacturer of a large variety of customized products or services at relatively low unit cost. |
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| decreases in cost per unit as output increases. |
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| minimum efficient scale (MES) |
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Definition
| output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest cost position that is achievable through economies of scale |
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| increase in cost per unit when output increases |
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| business-level strategy that successfully combines differentiation and cost leadership activities. |
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| savings that come from producing 2 or more outputs at less cost than producing each output individually, despite using the same resources and technology |
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| ambidextrous organization |
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Definition
| an organization able to balance and harness different activities in trade-off situations. |
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| an organization tat combines 2 or more business units, often active in different industries, under one overachieving corporation.. |
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| the decisions that senior management makes and the actions it takes in the quest for competitive advantage in several industries and markets simultaneously; addresses where to compete. |
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| the boundaries of the firm along three dimensions: industry value chain, products and services, and geography (regional, national, or global markets) |
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| transaction cost economies |
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Definition
| a theoretical framework in strategic management to explain and predict the scope of the firm, which is central to formulating a corporate-level strategy that is more likely to competitive advantage |
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| all costs associated with an economic exchange within a hierarchy, including recruiting and retaining employees, paying salaries and benefits, and setting up a business. |
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| situation in which an agent performing activities on behalf of a principal pursues his or her own interests. |
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| the firms ownership of its production of needed inputs or of the channels by which it distributes its outputs |
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Definition
| depiction of the transformation of raw materials into finished goods and services along distinct vertical stages, each of which typically represents a distinct number of different firms are competing. |
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| backward vertical integration |
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Definition
| changes in an industry value chain that involve moving ownership of activities upstream to the originating (inputs) point of the value chain |
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| forward vertical intigration |
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Definition
| changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain |
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Definition
| moving one or more internal value chain activities outside the firms boundaries to the other firms in the industry value chain. |
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Term
| related diversification strategy |
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Definition
| corporate strategy in which a firm derives less than 70% of its revenues from a single business activity but obtains revenues from other lines of business that are linked to the primary business activity |
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| geographic diversification strategy |
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Definition
| corporate strategy in which a firm is active in several different countries |
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Term
| product market diversification strategy |
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Definition
| corporate strategy in which a firm is active in several different product markets and several different countries. |
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Definition
| an increase in the variety of products or markets in which to compete |
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Term
| product diversification strategy |
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Definition
| corporate strategy in which a firm is active in several different product markets |
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Term
| unrelated diversification strategy |
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Definition
| corporate strategy in which a firm derives less than 70% of its revenues from a single business activity and there are few, if any, linkages among its businesses. |
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Definition
| situation in which the stock price of highly diversified firms is valued at less than the sum of their individual business units |
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Definition
| situation in which the stock price of related-diversification firms is valued at greater than the sum of their individual business units |
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Term
| Boston Consulting Group (BCG) Growth-share matrix |
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Definition
| a corporate planning tool i which the corporation is viewed as a portfolio of business units, which are represented graphically along relatively market share (horizontal axis) and speed of market growth (vertical axis). SBUs are plotted into 4 categories (dog, cash cow, star, and question mark) each of which warrants a different investment strategy |
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Definition
| the joining of 2 independent companies to form a combined entity |
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Definition
| the purchase or takeover of one company by another; con be friendly or unfriendly |
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| acquisition in which the target company does not wish to be acquired |
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| the process of acquiring and merging with competitors, leading to industry consolidation. |
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Definition
| a form of self-delusion, in which managers convince themselves of their superior skills in the face of clear evidence to the contrary |
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Definition
| a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage |
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Definition
| partnership based on contracts between firms. the most frequent forms are supply agreements, distribution agreements, and licensing agreements. |
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Definition
| partnership in which a least 1 partner takes partial ownership in the other partner |
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Definition
| a standalone organization created and jointly owned by 2 or more parent companies |
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Term
| alliance management capability |
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Definition
| a firms ability to effectively manage 3 alliance-related tasks concurrently- 1: partner selection and alliance formation 2: alliance design and governance, and 3: post-formation alliance management |
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Term
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Definition
| a social structure composed of multiple organizations (network nodes) and the links among the nodes (network ties). |
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