Vocab Flashcards
(123 cards)
1
Q
A corporate action in which a company buys most, if not all of the target company’s ownership stakes in order to assume control of the target firm. They are often made as part of a company’s growth strategy whereby it is most beneficial to take over an existing firm’s operations and niche compared to expanding on its own.
A
Acquisition
2
Q
A sequence of steps that must be taken, or activities that must be successfully performed for a strategy to succeed. It has three major elements
- specific tasks : what will be done and by whom
- time horizon : when will it be done
- ressource allocation : what specific funds are available for specific activities
A
Action plan
3
Q
Final decisions and predictions are unduly influenced by initial information that is given more weight in the decision process
A
Anchoring
4
Q
Information that is taken for fact without inspection
A
Assumption
5
Q
Discrete processes required to create, produce, sell and deliver products including but not limited to R&D, inbound logistics, sales, assembling final products, and training employees
A
Activities
6
Q
The process of gaining a better understanding of a complex topic by breaking it into smaller parts
A
Analysis
7
Q
When input sources are moved into the firm’s primary activity
A
Backward intergration
8
Q
When a firm focuses ressources on one key area, usually a smaller market segment or production category, and winning that market first to use it as a platform to break into the market category
A
Beach-head strategy
10
Q
What needs to be overcome by new entrants if they are to compete successfully. Factors created by incumbent firms to deter competition
A
Barriers to entry
10
Q
The value that an asset can be carried for on the balance sheet
A
Book value
10
Q
Describes the rationate of how an organization creates, delivers and captures value
A
Business model
11
Q
How an individual business competes in its particular marketplace. Its focus is orchestrating activities in the pursuit of competitive advantage.
A
Business-level strategy
12
Q
The orchestration and use of firm ressources
A
Capability
13
Q
Any feature of the business environment, either internal or external, which necessitates the intelligent application of ressources and capabilities to surmount
A
Challenge
15
Q
A number of things growing, fastened, or occuring close together as in a group or a bunch
A
Cluster
16
Q
The activity that causes commercial firms to develop new products, services, markets and technologies, which would give customers great selection and better products
A
Competition
17
Q
How a business is able to orchestrate its activities to offer its customers great value, eather by means of lower prices, or by providing greater benefits and services that justifies a higher price.
A
Competitive advantage
18
Q
A product that is used in conjunction with another product. Usually it has little to no value when consumed alone, but when combined with another product, it adds to the overall value of the offering.
Also, the product tends to have more value when paired with its thing than it does by itself.
A
Complement
19
Q
A SBU with a high market share in a low growth market
A
Cash Cow (BCG Matrix)
20
Q
Insights / ideas deducted from findings
A
Conclusion
21
Q
The degree to which a small number of firms provide a major portion of the insustry’s total production
A
Concentrated Industry
22
Q
A limitation or restriction
A
Contraint
23
Q
When a firm can orchestrate its activities to sell its products either at average industry prices to earn a profit higher than its rivals, or below average industry prices to gain additional market share
A
Cost leadership
24
Q
The primary activity that defines the firm’s main emphasis.
A
Core business
25
Is concerned with the overall scope of the organization and how value is added to the constituent business of the organization as a whole
Corporate-level strategy
26
When a corporation uses funds not generated from profitable business to build and maintain operations of unprofitable businesses until they become profitable
Cross subsidize
27
The collective learning in the organization, especially how to co-ordinate diverse capabilities and integrate multiple ressources.
Core competence
28
The few necessary factors, activities or conditions required for ensuring the success of a projet or firm
Critical Sucess Factors - CSF
Key Success Factors - KSF
FCS
29
The problem solving process of identifying patterns from a reasonably complete set of data
Deduction
30
Involves uniqueness in some dimension that is sufficiently valued by customers to allow a price premium.
- good R&D, innovation
- high quality products
- effective sales and marketing
- high level of customer service
Differentiation
31
Expected performance outcomes of a strategic action in terms of return, risk and stakeholder expectations
Acceptability
32
The process by which something (ie innovation, products, information) spreads among a population
Diffusion
33
Creates substancial growth by offering a new performance trajectory that, even if initially inferior to the performance of existing products, has the potential to become markedly superior and will undermine an industry's status quo business model
Disruptive innovation
34
When a firm enters an industry different from its existing businesses. Reasons include :
- reducing risk of relying on only one or few income sources
- avoiding cyclical or seasonal fluctuations by producing goods or services with different demand cycles
- achieving a higher growth rate
- countering a competitor by invading the competitor's core industry or market. In contrast to vertical integration, it does not increase a firm's market or monopolistic power
Diversification
35
Factors making it more difficult for a firm to get out of a particular business than it would otherwise have been. They include things like the cost of laying off staff, and long term contractual obligations with suppliers including rent, and other critical materials.
Exit barriers
36
The act of making a process, good or service easy to obtain by making it as uniform, plentiful and affordable as possible.
Something becomes like that when one offering is nearly indistinguishable from another. The more a good is this way, the more difficult it is for firms to achieve a price premium
Commoditization
37
The sale of a part of the firm (usually SBU) to a third party for cash or other financial considerations
Divestiture
38
SBUs with low market share in static or declining markets
Dog (BCG Matrix)
39
When the per-unit cost of production drops as the volume of output rises. This can occur because of technological reasons or because of higher bargaining power (lower input supply sources)
Economies of scale
40
Efficiency gains made through applying the organization's existing ressources or capabilities to new markets or services
For ex, many universities have large ressources in terms of student residences (accomodation), which they need for their students, but which are under-utilized when semesters are over. These residences are more efficiently used if the universities expand their scope of activities into holding conferences.
Economies of scope
41
When output activities are moved into the firm's owned activities
Forward integration
42
Answers if a firm has the necessary components to achieve a result and if that result is attractive in terms of return and risk
Feasability
43
Factual and verifiable statements
Findings
44
When an organization is better off than its competitors because it was the first to market with a product or service
First-mover advantage
45
Expresses the degree to which an organization matching its ressources and capabilities with the challenges and opportunities of the external environment
Fit
46
A cost that does not change with an increase or decrease in the amounts of goods or services produced. It has to be paid by a company, independant of any business activity
Fixed costs
47
An industry that contains many small or relatively small competitors and no, or few leaders in each relevant geographic and / or product market
Fragmented industry
48
Erroneously believing that the onset of a random event is less or more likely to happen following an event or a series of events.
For example, consider a series of 20 coin flips that have all landed with the "heads" side up. Under the gambler's fallacy, a person might predict that the next coin flip is more likely to land with the "tails" up
Gambler's fallacy
49
Relates to how effectively standardized products or services can be introduced into international markets versus the need to adapt them to local markets
Global-local dilemma
50
The general direction that determines the focus of the organization
Goal
51
Results when one company acquires another.
In an acquisition, the amount paid for the company over book value usually accounts for the target firm's intangible assets that arise from synergies
Goodwill
52
When a company acquires or merges with another company in the same industry.
For example Disney acquiring Pixar. A firm may also extend its existing ressources and capabilities into an unrelated business as with Starbucks extending its expertise in the coffee retail experience acquiring Teavana, a chain of tea houses
Horizontal integration
53
A slight change
Incremental
54
The problem solving technique whereby general inferences are made from particular instances
Induction
55
A group of firms producing similar products from similar supplies and selling to similar customers. A subset of a sector
Industry
56
Unevaluated data
Information
57
The process of gathering, integrating, analyzing and interpreting information so that it can be used to make a business decision
Intelligence
58
The problem solving technique whereby data are inserted into an incomplete data series (ex : missing letter or crossword)
Interpolation
59
Involves deliberate application of information, imagination and initiative in deriving greater or different values from ressources.
New ideas are generated and converted into useful products or to make existing products more profitable.
Innovation
60
A contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise
Joint venture
61
The time and other ressources that must be consumed to develop necessary capabilities to compete
Learning curve
62
When one firm authorises another company to manufacture or sell its products
Licensing
63
When a firm holds prices lower that what is profit-maximizing in the short term to create barrier entries
Limit pricing
64
The difference between a product's selling price and the fixed and variable production costs
Margin
65
Offering existing products to new markets, either segments or geographies
Market development
66
A measure of the amount of sales or adoption of a product compared to the total theorical market for that product.
It implies increasing the firm's share of the market with its current product range
Market penetration
67
Risk that arises from circumpstances beyond the control of the company
Market risk
68
A group of customers who have similar needs that are different from customer needs in other parts of the market
Market segment
69
An arrangement in which the assets of two or more firms are integrated into one firm
Merger
70
Aims to provide the employees and the stakeholders with clarity about the overriding purpose of the organization
Mission statement
71
Systems for organizing information that informs which actions maybe and eventually should be employed
Models and frameworks
72
A situation in which a single company owns all or nearly all of the market for a given type of produt or service
Monopoly
73
When two events cant occur at the same time. Either option A or B but not both
Mutually exclusive
74
The value added to businesses by corporate-level activities
Parenting advantage
75
A market structure in which the following five criteria are met :
- all firms sell an identical product
- all firms are price takers
- all firms have a relatively small market share
- buyers have complete info about the product : transparency
- freedom of exit and entry
Perfect competition
76
A collection of businesses owned by a single entity
Ex : P&G
Portfolio
77
The amount over the average a product can be sold for
Price premium
78
Specific and quantifiable outcomes that when achieved propel the firm towards its goals.
May be the expression of target sales, profit levels, rates of growth, dividend levels, share valuations, market share, customer service satisfaction, etc
Objective
79
Where there are at least two firms with similar market clout that together control the market
Oligopoly
80
It refers to any number of practices that allow a company to better utilize its inputs by, for example, creating more efficient processes.
Recently, McDonalds introduced touch screen, now KFC has the same
Operational Efficiency (OE)
81
SBU in a growing market, but without substancial market share
Question Mark (BCG Matrix)
82
The latest events dominate those in the less recent past, which are discounted or ignored
Recently bias
83
Clear and concise proposal of what should be done and why
Recommendation
84
Slashing prices in response to market entry to establish a reputation for being a fierce competitor
Reputation pricing
85
Inputs into a firm's production process
- tangible
- untangible
- unique
Ressources
86
The profitability of an unfavorable outcome for entities who have something to lose
Risk
87
Detailed and plausible views of how a firm's business environment might develop based on identified factors, likely generated from PESTEL analysis
Scenarios
88
When the firm can use the same raw and semi-finished materials and intermediate production processes to make a variety of different products
Scope
89
An area of the economy in which businesses share the same or a related product or service
Sector
90
When an SBU becomes an independant business from the corporation
Spin-Off
91
Individuals or groups who can affect or be affected by the actions of a firm. These include but are not limited to shareholders, suppliers, employees, customers, partners
Stakeholders
92
An SBU that has a high market share in a growing market
Star (BCG Matrix)
93
An arrangement between two companies that have declined to share ressources to undertake a specific, mutually beneficial project.
It is less involved and less permanent than a joint venture
Strategic Alliance
94
The assessment of a firm's current competitive position and the identification of future valuable competitive positions and how to achieve them
Strategic analysis
95
A distinct business within a corporation that has its own customers, competition, and draws upon its own ressources and capabilities
SBU
| Strategic Business Unit
96
The basic scheme for how the organization will achieve its vision
Strategic Direction
97
The tendency for strategies to develop incrementally on the basis of historical and cultural influences, but fail to keep pace with a changing environment
Strategic Drift
98
A market opportunity that is either not recognized or fully exploited by competitors
Strategic gap
99
Organizations within an industry with similar characteristics that are following similar strategies and compete for similar customers
Strategic groups
100
The direction and scope of an organization over the long term, which aims to achieve advantage in a changing environment by configuring ressources and capabilities to satisfy stakeholder expectations
Strategy
101
When a supplier "locks in" its customers by creating a higher barrier to switching to a competitor
Strategic lock-in
102
A superior ressource and / or capability that a firm can leverage to outperform competition and / or meet challenges in an environment
Strength
103
Relates to how a business is organized in terms of businesses, and management
Structure (Corporate)
104
Alternative products or services that produce similar benefits sought by the customer. Creates a constraint on what can be charged for the product
Substitutes
105
Concerned with if a recommendation fits with key issues relating to the firm's environment, capabilities, ressources and is appropriate to stakeholder expectations
Suitability
106
Investments that cannot be recovered once invested. Including but not limited to R&D, transaction costs, marketing in terms of research, product development, launch and advertising
Sunk Cost
107
Costs incurree when a customer changes suppliers. May relate to training, integration, downtime
Switching costs
108
The concept that the value and performance of two businesses combined will have greater value than if they were separate.
That, or the potential financial benefit achieved through the combining of companies, is often a driving force behind a merger or acquisition
Synergy
109
The "doing" aspect that follows the planning
Tactics
110
Necessary to be able to compete, but not a source of competitive advantage. However, the lack of it is likely to be a weakness
Threshold weakness / capability
111
An implement used in the practice of a vocation to get a predetermined result. In terms of strategy, they are frameworks, language, matrices, and other techniques used to make decisions
Tool
112
Forced choice where only ONE option is possible
Trade-off
113
Expense of carrying out a purchase or sale. The opportunity costs incurred when a proposed transaction is not realized. May include consumer search, transport and time.
These include legal proceedings, vetting, filings, and time cannot be recovered if a deal does not materialize
Transaction cost
114
Risk generated from factors originating from inside a firm that are independant of the outside environment
Unique risk
115
A framework that is used to organize the activities a business must perform to create, make, distribute, sell and service a product. Used to understand which activities add the most of it to building a competitive advantage, which activities may be downsized or abandonned, or which activities may be outsourced.
Value chain
116
The guiding principles of the firm. The building blocks of a firm's culture. Creates a procedure for HOW a firm will fullfill its mission and achieve its vision
Values (Corporate)
117
Set of inter-industry firms performing discrete activities necessary to create, sell and service an industry's product.
Value network
118
Costs that vary depending on a company's production volume; they rise as production increases and fall as it decreases.
Variable costs
119
When a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and / or distributor
It can help companies reduce costs and improve efficiency by decreasing transportation expenses and reducing turnaround time among other advantages
Vertical integration
120
Vertical integration that cuts off a competitor's access to important inputs
Vertical foreclosure
121
Concerned with what the firm aspires to be. Its purpose is to set out a clear view of the future to motivate, gain commitment and stretch performance.
Basically what will the company be in the future
Vision statement
122
An inferior or absent ressource and / or capability that competition may exploit to gain advantage. May also inhibit a firm into successfully navigating environmental challenges
Weakness
123
When the winner in of an auction is the bidder who has the highest valuation of the asset and thus likely overvalues it
Winner's curse
