MGT 302 - Ch. 7

Competitor

Any other business in the same industry as yours.

Scope

A characteristic of a market that defines the geographic range covered by the market -- from local to global.

Scale

A characteristic of a market that describes the size of the market -- a mass market or a niche market.

Mass market

A customer group that involves large portions of the population.

Cost strategy

A generic strategy aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer.

Focus strategy

A generic strategy that targets a portion of the market, called a segment or niche.

Brainstorming

A group discussion in which criticism is suspended in order to generate the maximum number of ideas.

Decline stage

A life cycle stage in which sales and profits of the firm begin a falling trend.

Niche market

A narrowly defined segment of the population that is likely to share interests or concerns.

Difficult to Imitate

A resource characteristic which enhances value through offering uniqueness to the buyer.

Rare resource

An asset, capability, organizational process, information, or knowledge that is not generally available to competitors.

Valuable resource

An asset, capability, organizational process, information, or knowledge that lets a firm take advantage of opportunities or lock out competitors.

Parallel Competition

An imitative business that competes locally with others in the same industry.

growth stage

An industry life cycle stage in which customer purchases increase at a dramatic rate.

Entry wedge

An opportunity that makes it possible for a new business to gain a foothold in a market.

Retrenchment

An organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival.

Incremental innovation

An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas.

Imitative strategy

An overall strategic approach in which the entrepreneur does more or less what others are already doing.

Resource

Any asset, capability, organizational process, information, or knowledge that contributes to the firm's performance.

Tangible resources

Assets of a firm that can be easily and concretely identified

Industry dynamics

Changes in competitors, sales and profits in an industry over time.

Boom

A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time.

Gross profit

Funds left over after deducting the cost of goods sold.

Combinational competencies

Organizational capabilities that come from combining tangible and intangible resources in ways superior to the competition.

Competitive advantage

That particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry or market.

transformational competencies

The abilities of a firm to make its product or service in a way that enhances value or efficiency compared to other firms.

Organizational capabilities

The abilities, skills, and competencies used by the firm to make profits from tangible and intangible resources.

Net profit

The amount of money left after operating expenses are deducted from the business.

Market

The business term for the population of customers for your product or service.

Strategic directions

The conceptualization of how a business might best move in response to the findings of a SWOT analysis -- flaunt,fix, fight, flee, find, or fire up.

Degree of Similarity

The extent to which a product or service is like another.

Industry

The general name for the line of product or service being sold, or the firms in that line of business.

Generic strategies

Three widely applicable classic strategies for businesses of all types -- differentiation, cost, and focus.

Industry analysis (IA)

A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends.

Differentiation strategy

A type of generic strategy aimed at clarifying how one product is unlike another in a mass market.

Shake-out

A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry.

Innovation strategy

An overall strategic approach in which a firms seeks to do something that is very different from what others in the industry are doing.

Intangible resources

Capabilities, organizational processes, information, or knowledge of a firm that are not clearly evident.

Profit before taxes

The amount of profit earned by a business before calculating the amount of income tax owned.

Introduction stage

The life cycle stage in which the product or service is being invented and initially developed.

Pure innovation

The process of creating new products or services, which results in a previously unseen product or service.

Maturity stage

The third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.