Test 1 - Reversed Flashcards
(118 cards)
1
Q
an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage
A
Strategic Management
2
Q
underperformance relative to other competitors in the same industry or the industry average
A
Competitive disadvantage
3
Q
superior performance relative to other competitors in the same industry or the industry average
A
Competitive advantage
4
Q
performance of two or more firms at the same level
A
Competitive parity
5
Q
outperforming competitors or the industry average over a prolonged period of time.
A
Sustainable competitive advantage
6
Q
cooperation by competitors to achieve a strategic objective
A
Co-operation
7
Q
the results of managers actions to influence firm performance
A
Firm effects
8
Q
the results attributed to the choice of industry in which to compete
A
Industry effects
9
Q
a standalone division of a larger conglomerate, with its own profit-and-loss responsibility.
A
Strategic business unit
10
Q
organizational plan that details the firms competitive tactics and initiatives; in short, how to the firm intends to make money
A
Business model
11
Q
the largest but poorest socioeconomic group of the world’s pyramid.
A
Bottom of the pyramid
12
Q
side-effects of production and consumption that are not reflected in the price of a product
A
Externalities
13
Q
a process in which a group of people voluntarily performs tasks that were traditionally completed by a firms employees.
A
Crowdsourcing
14
Q
individuals or groups who can affect or are affected by the actions of the firm
A
Stakeholders
15
Q
“a model that links three interdependent strategic management tasks- analyze, formulate, and implement- that, together, help firms conceive of and implement a strategy that can improve performance and result in competitive advantage.Analysis: Getting started1. What is the strategy and why is it important?2. The strategic management process3. External analysis: industry infrastructure, competitive forces, and strategic groups 4. Internal analysis: resources, capabilities, and activities 5. Competitive advantage and firm performance Formulation: business strategy6. Business strategy: differentiation, cost leadership, and integration7. Business strategy: innovation and strategic entrepreneurship Formulation: corporate strategy 8. Corporate strategy: vertical integration and diversification 9. Corporate strategy: acquisitions, alliances, and networks 10. Global strategy: competing around the world Implementation11. Organizational design: structure, culture, and control 12. Corporate governance: business ethics, and strategic leadership “
A
AFI strategy framework
16
Q
method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage
A
Strategic management process
17
Q
a statement about what an organization ultimately wants to accomplish; it captures the companys aspiration.
A
Vision
18
Q
the staking out of a desired leadership position that far exceeds a companys current resources and capabilities
A
Strategic intent
19
Q
description of what an organization actually does- what its business is- and why it does it; can be customer-oriented or product-oriented
A
Mission
20
Q
actions that are costly, long term oriented, and difficult to reverse
A
Strategic commitments
21
Q
ethical standards and norms that govern the behavior of individuals within a firm or organization
A
Organizational values
22
Q
a rational, top down process through which management can program future success; typically concentrates strategic intelligence and decision-making responsibilities in the office of the CEO.
A
Strategic (long range) planning
23
Q
strategy planning activity in which managers envision different what if scenarios to anticipate plausible futures
A
Scenario planning
24
Q
the strategic option that managers think most closely matches reality at a given point in time
A
Dominant strategic planning
25
any activity a firm pursues to explore and develop new products or processes, new markets, or new ventures.
Strategic initiative
26
any unplanned strategic initiative undertaken by mid-level employees of their own volition.
Emergent strategy
27
the outcome of a rational and structured top-down strategic plan
Intended strategy
28
part or all of a firms strategic plan that falls by the wayside due to unexpected events
Unrealized strategy
29
combination of intended and emergent strategy
Realized strategy
30
the commercialization of any new product, process, or idea, or the modification and recombination of existing ones. To drive growth, it also needs to be useful and successfully implemented
Innovation
31
a situation in which competitive intensity has increased and periods of competitive advantage have shortened, especially in new, technology based industries, making any competitive advantage a string of short lived advantages.
Hypercompetition
32
a firms ability to understand, evaluate, and integrate external technology developments.
Absorptive capacity
33
a situation in which a new technology revolutionizes an existing industry and eventually establishes itself as the new standard.
Paradigm shift
34
periods of time in which the underlying technological standard changes.
Discontinuities
35
a situation in which transactions are likely not to take place because there are only a few buyers and sellers, who have difficulty finding one another.
Thin markets
36
business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choices
Long tail
37
an innovation that leverages new technologies to attack existing markets from the bottom up
Disruptive innovation
38
the 4 different stages- introduction, growth, maturity, and decline- that occur in the evolution of an industry over time.
Industry life cycle
39
the positive effect that one user of a product or service has on the value of that product for other users.
Network effects
40
an agreed upon solution about a common set of engineering features and design choices; aka dominant design
Standard
41
a new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets.
Architectural innovation
42
an innovation that draws on novel methods or materials, is derived from either an entirely different knowledge base or from the recombination of the firm's existing knowledge base with a new stream of knowledge, or targets new markets by using new tech.
Radical innovation
43
an innovation that squarely builds on the firm’s establish knowledge base, steadily improves the product or service it offers, and targets existing markets by using existing technology.
Incremental innovation
44
the pursuit of innovation using the tools and concepts available in strategic management
Strategic entrepreneurship
45
new products, such as the airline, EV's ipod
Product innovations
46
new ways to produce existing products or delivering services
Process innovations
47
the process by which people undertake economic risk to innovate- to create new products, processes, and sometimes new organizations
Entrepreneurship
48
the actions managers take in their quest for competitive advantage when competing in a single product market.
Business level strategy
49
a firm's strategic profile based on value creation and cost. The goal is to create as large a gap as possible between the value the firm's product/service creates and the cost required to produce it V-C
Strategic position
50
relationship that captures the result of performing best practices at any given time; the function is convex (bowed outward) to capture the trade off between value creation and production cost.
Productivity frontier
51
an organization that combines two or more business units, often active in different industries, under one overarching corporation.
Conglomerate
52
an organization able to balance and harness different activities in trade off situations.
Ambidextrous organization
53
savings that come from producing two or more outputs at less cost than producing each output individualy, despite using the same resources and technology
Economies of scope
54
business level strategy that successfully combines differentiation and cost leadership activities
Integration strategy
55
increase in cost per unit when output increases
Diseconomies of scale
56
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.
Minimum efficient scale
57
decrease in cost per unit as output increases
Economies of scale
58
situations that require choosing between a cost or value position, necessary because higher value tends to require higher cost.
Strategic tradeoffs
59
generic business strategy that seeks to create higher value for customers than the value that competitors create, by delivering products or services with unique features while keeping the firm's cost structure at the same or similar levels
Differentiation strategy
60
the manufacture of a a large variety of customized products or services at relatively low unit cost.
Mass customization
61
same as the differentiation strategy except with a narrow focus on a niche market
Focused differentiation strategy
62
same as the cost leadership strategy except with a narrow focus on a niche market
Focused cost leadership strategy
63
the size- narrow or broad- of the market in which a firm chooses to compete
Scope of competition
64
generic business strategy that seeks to create the same or similar value for customers by delivering products or services at a lower cost than competitors, enabling the firm to offer lower prices to its customers.
Cost-leadership strategy
65
the dollar amount a consumer would attach to a good or service; the consumer's maximum willingness to pay; sometimes also called reservation price
Value
66
difference between value IV and cost C, or V-C; sometimes called economic contribution
Economic value created
67
strategy implementation tool that harnesses multiple internal and external performance metrics in order to balance financial and strategic goals
Balanced scorecard
68
return on risk that includes stock price appreciation plus dividends received over a specific period
Total return to shareholders
69
capital provided by shareholders in exchange for an equity share in the company; it cannot be recovered if the firm goes bankrupt
Risk capital
70
difference between price charged and cost to produce
Profit
71
difference between the value a consumer attaches to a good or service and what he or she paid for it (V-P)
Consumer surplus
72
the value of the best forgone alternative use of the resources employed
Opportunity cost
73
unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at a lower cost.
Core competencies
74
a model that sees resources as key to superior firm performance. if a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain a competitive advantage.
Resource based view
75
a framework that allows managers to synthesize insights obtained from an internal analysis of the company’s strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and T).
SWOT analysis
76
a situation in which different social and business systems interact with one another
Social complexity
77
a situation in which the cause and effect of a phenomenon are not readily apparent.
Causal ambiguity
78
a situation in which the options one faces in the current situation are limited by decisions made in the past.
Path dependence
79
the firm’s level of investments to maintain or build a resource
Resource flows
80
the firm’s current level of intangible resources.
Resource stocks
81
a model that emphasizes a firm’s ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment
Dynamic capabilities perspective
82
the conceptualization of a firm as a network of interconnected activities.
Strategic activity system
83
firm activities that add value indirectly, but are necessary to sustain primary activities.
Support activities
84
firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain
Primary activities
85
resources with physical attributes, which thus are visible
Tangible resources
86
resources that do not have physical attributes and thus are invisible
Intangible resources
87
the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value. Primary activities directly add value; support activities add value indirectly
Value chain
88
assumption in the resource based view that a firm is a bundle of resources and capabilities that differ across firms
Resource heterogeneity
89
assumption in the resource based view that a firm has resources that tend to be sticky and that do not move easily from firm to firm
Resource immobility
90
part of VRIO... the characteristic of having in place an effective organizational structure and coordinating systems to fully exploit the competitive potential of the firm’s resources and capabilities
Organized to capture value
91
part of VRIO... a resource is costly to imitate if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost
Costly to imitate resource
92
one of the 4 criteria of VRIO... a resource is rare if the number of firms that possess it is less than the number of firms it would require to reach a state of perfect competition
Rare resource
93
one of the four key criteria in the VRIO framework; a resource is valuable if it allows the firm to take advantage of an external opportunity and/or neutralize an external threat.
Valuable resource
94
a theoretical framework that explains and predicts firm level competitive advantage. A firm can gain a competitive advantage if it has resources that are valuable (V), rare (R), and costly to imitate (I); the firm must also organize (O) to capture the value of the resource.
VRIO framework
95
"obstacles that determine how easily a firm can enter an industry. Entry barriers are often one of the most significant predictors of industry profitability. - High entry barriers can correspond to high industry profitabilityThreat of entry is high when:- Customer switching costs are low- Capital requirements are low- Incumbents do not possess: proprietary technology, established brand equity - New entrants expect that incumbents will not or cannot retaliate."
Entry Barriers
96
"a framework that explains differences in industry performance. it identifies 4 different industry types:1. Perfect competition2. Monopolistic competition3. Oligopoly 4. Monopoly - Fragmented industries tend to be less profitable than consolidated ones. "
Structure-conduct-performance SCP model
97
"bargaining power of suppliers captures pressures that industry suppliers can exert on an industry, and therefore a company’s, profitability. - Powerful suppliers can raise the cost of production by demanding higher prices or delivering lower quality goods.The power of Suppliers is high when:- Incumbent firms face significant switching costs when changing suppliers- Suppliers offer products that are differentiated- There are no readily available substitutes for the products or services that the supplier offer- Suppliers can credibly threaten to forward integrate into the industry "
Power of Suppliers
98
a framework proposed by Porter that identifies five forces that determine the profit potential of an industry and shape a firm’s competitive strategy.Ex. Five forces in airlines v. soft drinks: - Porter calls airline industry a zero star industry because each of the 5 forces is strong, leading to inferior industry performance. • No loyalty amongst customers, just want cheapest flight • Switching costs are low • Low entry barriers• Strong supplier power (providers of engines, planes, etc.)• Easy substitutes (drive instead)- Soft drinks: opposite... one of the most profitable industries. Porter says 5 star industry because each of the 5 forces is weak...which leads to high industry performance • High barriers to entry because of the strong brand equity of Coke/Pepsi• Loyal consumers, Pepsi or Coke fan...dont switch back and forth• Limited power of suppliers• Weak power of buyers- price is generally always the same, not cheaper at Walmart or discount stores.
Five Forces Model
99
a group of companies offering similar services or products. It makes up the supply side of the market, while customers make up the demand side.
Industry
100
"a framework that categorizes and analyzes an important set of external forces (political, economic, sociocultural, tech, ecological, legal)that might impinge upon a firm. These forces are embedded in the global environment and can create both opportunities and threats for firms - Apply the PESTEL model to organize and asses the impact of external forces on the firm - Political, Economic. Socio cultural, technology, ecological and legal"
PESTEL model
101
Describes the processes and actions of government bodies that can influence the decisions and behavior of firms
Political (PESTEL)
102
"mostly macroeconomic... managers need to consider how the following 5 macros can affect firm strategy:• Growth rates• Interest rates• Levels of employment• Price stability • Currency exchange rate"
Economic (PESTEL)
103
Captures society’s cultures, norms, and values. Constantly fluctuating, which means they’re constantly creating new trends, threats, opportunities, etc.
Sociocultural (PESTEL)
104
Capture the application of knowledge to create new processes and products. Recent examples of innovations are the EV and the iPad. Tech advancements are constantly changing and at a fast pace and can create serious disadvantages/advantages depending on what side of the innovation you’re on.
Technological factors (PESTEL)
105
Captures the outcomes of the political processes as manifested in laws, mandates, regulations, and court decisions- these can all have a direct impact on the firms bottom line and ultimately their strategy.
Legal (PESTEL)
106
Concern broad environmental issues such as the natural environment, global warming, and sustainable growth. Natural and business world can no longer be separated, they’re inexplicably linked and manager must acknowledge that.
Ecological (PESTEL)
107
"this concerns the pressure buyers can put on the margins of producers in an industry by demanding a lower price or higher quality good. Threat of Substitute: the idea that products or services available from outside the given industry will come close to meeting the needs of current customers. The power of buyers is high when:- There are few large buyers- Each buy purchases large quantities relative to the size of a single seller - The industry’s products are standardized or undifferentiated commodities- Buyers face little or no switching costs- Buyers can credibly threaten to backward integrate into the industry "
Power of Buyers
108
industry specific factors that separate one strategic group from another
Mobility barriers
109
"describes the intensity with which companies in an industry jockey for market share and profitability. The rivalry among existing competitors is high when:- There are many competitors in the industry- The competitors are roughly of equal size- Industry growth is slow, zero, or negative- Exit barriers are high- Products and services are direct substitutes"
Rivalry Amongst Competitors
110
obstacles that determine how easily a firm can leave an industry.
Exit barriers
111
a framework that explains firm differences in performance in the same industry by clustering different firms into groups based on a few key strategic dimensions.
Strategic group model
112
the set of companies that pursue similar strategy within a specific industry
Strategic group
113
a process whereby formerly unrelated industries begin to satisfy the same customer need.
Industry convergence
114
"- Complement: a product, service, or competency that adds value to the original product offering when the two are used in tandem. - Complementor: a company that provides a good or service that leads customers to value your firm’s offering more when the two are combined. - Ex: iTunes and the iPhone/iPod... sell the hardware, the software compliments the hardware."
6th Force, Strategic Role of Complements
115
a. Many small firms
b. Firms are price takes
c. Commodity product
d. Law entry barriers
Perfect competition (SCP)
116
a. Many firms
b. Some pricing power
c. Differentiated product
d. Medium entry barriers
Monopolistic competition (SCP)
117
a. Few large firms
b. Some pricing power
c. Differentiated product
d. High entry barriers
Oligopoly (SCP)
118
a. One firm
b. Considerable pricing power
c. Unique product
d. Very high entry barriers
Monopoly (SCP)
