Term
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Definition
| external environmental basis for above average returns. (industry choice is influential on returns) |
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Term
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Definition
| resources (inputs) and capabilities are what set companies apart and give them competitive advantages in industries that have exploitable opportunities. |
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Term
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Definition
what the firm wants to be and ultimately achieve
"big-picture" with passion that helps people feel what they are supposed to be doing in an organization.
(Enduring) (Foundation for the Mission) |
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Term
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Definition
businesses that the firm wants to compete with and customers it wants to serve.
(More Specific) (Flexible) (Adapts to changes in environments) |
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Term
| Visions/Missions (5 internal environment Benefits) |
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Definition
1. provide direction to form strategies
2. prioritize resource allocation
3. provide opportunities for collaboration over issues
4. appreciation for the necessities of trade offs
5. learning more about the culture and character of the firm |
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Term
| Vision/ Mission (3 external environment Benefits) |
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Definition
1. sets the company apart from competitors
2. reflects organizations priorities
3. signals culture and values |
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Term
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Definition
People who are affected/have claim on firms performance.
When not everyone can be happy power is the key criterion for prioritizing stakeholders. |
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Term
| Three kinds of Stakeholders |
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Definition
1. Capital Market Stakeholders (shareholders, banks)
2. Product Market Stakeholders (customers, suppliers)
3. Organizational Stakeholders (employees, managers) |
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Term
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Definition
| ideologies, symbols, and core values that are shared throughout the firm that influence how the firm conducts business. |
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Term
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Definition
influence all industries
creates both opportunities and threats
(swOT)
Lots of uncertainty. |
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Term
| External Environmental Analysis - 4 parts |
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Definition
1. Scanning (signals of changes and trends)
2. Monitoring (Detecting meaning from signals)
3. Forecasting (developing projections based on monitoring)
4. Assessing (determine importance of changes for firms strategic management) |
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Term
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Definition
| if exploited correctly they can help the firm achieve strategic competitiveness |
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Term
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Definition
| condition in the general environment that may hinder a companies efforts to achieve strategic competitiveness. |
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Term
General Environment
(Seven Environmental Segments) |
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Definition
(Seven Environmental Segments)
1. Demographic (age structure)
2. Economic (inflation, interest rates)
3. Political/ Legal (taxation laws)
4. Socio-cultural (workforce diversity)
5. Technological (production innovation)
6. Global (global markets)
7. Physical Environmental Segment (Energy Consumption) |
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Term
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Definition
| dimensions in the broader society that influence an industry and the firms within it. |
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Term
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Definition
| group of firms producing close substitutes |
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Term
| Industry Environmental Analysis |
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Definition
| Porters 5 Forces - allows firms to determine industry attractiveness |
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Term
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Definition
1. Threat of New Entrants
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threat of substitute products
5. Rivalry among Firms (High exit barriers) |
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Term
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Definition
| (Barriers to Entry) (Economies of Scale) (Product Differentiation) (Capital Requirements) (Switching Cost) (Access to Distribution Channels)(Government Policy) |
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Term
| Bargaining power of suppliers |
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Definition
| (Domination) (No Substitutes) (Firm is too small to be a serious buyer) (Goods critical to marketplace success) |
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Term
| Bargaining power of buyers |
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Definition
| (Purchase Large Portion on Suppliers industry) (Low Switching Cost) (Undifferentiated product) |
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Term
| Threat of substitute products |
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Definition
| (goods or services from outside the industry that perform similar functions) |
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Term
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Definition
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Term
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Definition
| are physical, visible assets like plant and equipment, |
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Term
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Definition
| are less visible, like reputation or knowledge (more valuable) (harder to imitate, harder to understand, harder to purchase (p. 78 and 79 of the book)) |
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Term
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Definition
The legal version is when corporate insiders—officers, directors, and employees—buy and sell stock in their own companies.
Illegal insider trading refers generally to buying or selling a security, while in possession of material, nonpublic information about the security |
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Term
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Definition
| Suppliers, Competitors, Customers, Firm |
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Term
| Firms achieve strategic competitiveness and earn above average returns when.... |
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Definition
| their unique core competencies are efficiently acquired, bundled, and leveraged to take advantage of opportunities in the external environment in ways that create value for customers. |
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Term
| Three factors of the Sustainability of a Core Competence |
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Definition
1. rate of existence due to environmental changes
2. availability of substitutes
3. how easy the competence is to imitate |
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Term
| Business level strategy = |
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Definition
| How should we compete effectively within a given business? |
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Term
| Corporate Level Strategy = |
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Definition
| What business should we be in? |
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Term
| Competitive advantage may be achieved via: |
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Definition
1. Overall cost leadership(Low-cost-position relative to a firm’s peers)
2. Differentiation (Create products and/or services that are unique and for which customers are willing to pay a premium)
3. Focus strategy (Narrow product lines, buyer segments, or targeted geographic markets) |
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Term
| Functional Level Strategy |
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Definition
| how can a functional area (Marketing) (Finance) best support the business strategy |
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Term
| Strategy Inputs that lead to the Mission/Vision of companies |
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Definition
| External and Internal Environment |
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Term
| Core Criteria for Sustainable Advantages (Four) |
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Definition
1. Rare
2. Valuable
3. Costly to imitate
4. Non-substatutable |
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Term
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Definition
| Value chain moves left-to-right toward the customer |
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Term
| Value Chain is broken into two sections |
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Definition
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Term
| Primary Aspects of the Value Chain |
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Definition
Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Service |
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Term
| Support Aspects of the Value Chain |
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Definition
Organizational Infrastructure
Human Resource Management
Technological Development
Procurement |
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Term
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Definition
Cost Leadership
Limited Customer Service
Build it yourself
Low Manufacturing Cost |
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Term
| Business Level Strategy Pursuing low cost and a broad target |
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Definition
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Term
| Business Level Strategy Pursuing Uniqueness and a broad target |
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Definition
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Term
| Business Level Strategy Pursuing Low cost and a Narrow Target |
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Definition
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Term
| Business level Strategy Pursuing Uniqueness and a Narrow Target |
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Definition
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Term
| Stages of the Industry Life Cycle |
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Definition
Introduction
Growth
Maturity
Decline |
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Term
| Factors of the industry Life Cycle |
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Definition
Generic Strategies
Market Growth Rate
Number of segments
Intensity of competition
Emphasis of product design
Emphasis on Process Design
Major Functional Area's of concern
Overall objective |
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Term
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Definition
| An ethical decision should produce the greatest good for the greatest number of people |
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Term
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Definition
| An ethical decision should distribute benefits and harm among people in a fair, equitable and impartial manner |
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Term
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Definition
| An ethical decision should be one that a manager has no hesitation about communicating to people outside the company because the typical person in a society would thing the decision is acceptable |
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Term
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Definition
| An ethical decision should maintain and protect the fundamental rights and privileges of people. |
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Term
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Definition
Behave unethically and illegally
(Enron) |
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Term
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Definition
Activity embrace socially responsible behavior, promote interests of all stakeholders
(Costco) |
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Term
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Definition
Abide strictly by legal requirements
(Cargill) |
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Term
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Definition
Behave legally and ethically and try to balance the interests of different stakeholders
(Hormel) |
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Term
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Definition
| Ways company views or obligations on how it should take into account Stakeholders |
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Term
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Definition
| involves two way communication internally and externally |
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Term
Cost Leadership Strategy
Pro's/Risk |
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Definition
Pros: emphasize efficiency, standardized products for the typical customer
Risk: Competitors Technology improvements, failure to detect change in customer needs, imitable cost saving strategy |
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Term
Differentiation Strategy
Pro's/Risk |
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Definition
Pro's: Provide customers with different products that add value to their lives
Risk: customers no longer feel the product is worth the premium price, similar product is enters market at a lower price, knockoffs |
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Term
Competitive Pros and Risk of Focus Strategies
(Focused Cost Leadership, Focused Differentiation) |
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Definition
Pro's: Successful when provides a value that exceeds the value from firms serving customers on an industry wide basis
Risk: getting "out-focused", focus becomes attractive to the broader industry, reduction in need |
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Term
| Risk associated with Integrated Cost Leadership/Differentiation |
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Definition
Pro's: Flexibility
Risk: value is not high enough and product gets stuck in the middle.
Target's use of Converse |
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Term
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Definition
| when someone hires someone else to make a decision as a service |
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