Chapter 1- Strategic Management and Strategic Competitiveness

Risk

an investor's uncertainty about the economic gains or losses that will result from a particular investment.

Core competencies

are capabilities that serve as a source of competitive advantage for a firm over its rivals.

Global Economy

is open in which goos, services, people, skills, and ideas move freely across demographic borders.

Organizational culture

refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influences how the firm conducts business.

Strategic management process

the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns.

Strategy

an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

Strategic Flexibility

A set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.

Strategic Competitiveness

Is achieved when a firm successfully formulates and implements a value creating strategy.

Capability

Is the capacity for a set of resources to perform a task or an activity in a integrative manner.

Competitive Advantage

When it implements a strategy competitors are unable to duplicate or find too costly to try to imitate.

Strategic leaders

are people located in different parts of the firm using the strategic management prices to help the firm reach its vision and mission.

Average returns

are returns equal to those an investor expects to earn from other investments with a similar amount of risk

Above-average returns

are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Stakeholders

are the individuals and groups who can affect the firm's vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm's performance.

Profit Pool

entails the total profits earned in a industry at all points along the value chain.

Resources

inputs into a firm's production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers.

Vision

is a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve.

Mission

specifies the business or businesses in which the firms intends to compete and the customers it intends to serve.