Chapter 7
Rare resource
An asset, capability, organizational process, information, or knowledge this is not generally available to competitors
Incremental Innovation
An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas
Innovative Strategy
An overall strategic approach in which a firm seeks to do something that is very different from what others in the industry are doing.
Imitative Strategy
An overall strategy
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
Value Chain
a collection of processes and activities a small business conducts to design, produce, market, deliver, and support its product/service
Laggard
a customer adoption segment that holds off buying new products or services until either they are forced to or prices reach rock bottom
Focus strategy
a generic strategy that targets a portion of the market, called a segment or niche
Gross Profit
Funds left over after deducting the cost of goods sold
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
Profit before Taxes
The amount of profit earned by a business before calculating the amount of income tax owed
Market
The business term for the population of customers for your product or service
Strategic Direction
The conceptualization of how a business might best move in response to the findings of a SWOT analysis-Flaunt, Fix, Fight or Flee
Generic Strategies
Three widely applicable classic strategies for businesses of all types-differentiation, cost, and focus
Retrenchment
An organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival
Industry life cycle
The stages an industry goes through from its birth to its ending. There are five stages : introduction, growth, maturity, decline, and death
Maturity Stage
The third life cycle stage, marked by a stabilizzation of demand,with firms in the industry moving to stabilize through cost strategies
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
Pioneers
A customer adoption segment characterized by customers most willing to be the first to try or have something new
Late Majority
A customer adoption segment describing people who wait until the technology has stabilized and the costs have begun to drop
Early Adopters
A customer adoption segment that purchase after pioneers
intangible resources
Capabilities, organizational processes, information, or knowledge of a firm that are not clearly evident
Benefits
Characteristics of a product or service that the target customer would consider worthwhile
Highly Fragmented Industries
Collections of similar businesses in which virtually all firms have small market shares
Early Majority
Customer adoption segment that purchases after early adopters, and whose demand creates a mass market
Combinational competencies
Organicational capabilities that come from combining tangible and intangible recources in ways superior to the competition
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
Introduction stage
The life cycle stage in which the product or service isbeing invented and initially developed
Core competency
The main work of a firm ina particular line of business
competitive advantage
The particular way a firm implements customer benefits that keeps the firm ahead of other market firms in the industry or market
Pure Innovation
The process of creating new products or services, which results in a previously unseen product or service
Differentiation Strategy
a type of generic strategy aimed at clarifying how one product is unlike another in a mass market
Brainstorming
A group discussion in which criticism is suspended in order to generate the maximum number of ideas
Trade Association
A group of people in the same industry who band together to gather and share information and present and represent the industry to the public and government
Customer Segment
A group or subgroup of potential purchasers that can be approached in a coherent manner
decline stage
A life cylce 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
Industry Analysis
A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends
Difficult to Imitate
A resource characteristic which enhances value through offering uniqueness to the buyer.
Valuable Resource
An asset, capability, organizational process, information, or knowledgge that lets a firm take advantage of opportunities or lock out competitors
Parallel Competition
An imitative business that competes 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
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