BA Chapter 7
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.
Competitor
Any other business in the same industry as yours.
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.
Difficult to Imitate
A resource characteristic which enhances value through offering uniqueness to the buyer.
Entry Wedge
An opportunity that makes it possilble 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.
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.
Incremental Innovation
An overall strategic aproach in which a firm patterns itself on other firms, with the exception of one or two key areas.
Scope
A characteristic of a market 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 of a niche market.
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.
Value Resource
An asset, capability, organizational process, information, or knowledge that lets a firm take advantage of opportunities or lock out the competitors.
Rare Resource
An assett, capability, organizational process, information, or knowledge that is not generally available to 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.
Intangible Resources
Capabilties, organizational processes, information, or knowledge of a firm that are not clearly evident.
Industry Dynamics
Changes in competitors, sales and profits in an industry over 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.
Transformational Capabilities
The abilities of a firm to make its product or service in a way that enhances value or efficiency compared to other firms.
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 in which the product or service is being invented and initially developed.
Competitive Advantage
The particular way a firm implements customer benefits that keeps the firm ahead of other 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.
Maturity Stage
The third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits thorugh cost strategies.
Generic Strategies
Three widely applicable classic strategies for businesses of all types- differentiation, cost, and focus.
Strategy
the idea and actions that explain how a firm will make its profit.
Differentiation Strategy
A type of generic strategy aimed at clarifying how one product is unlike another in a mass market.
Boom
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time.
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, Flee, Find, or Fire-up.
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 opereating expenses are deducted from gross profit.
Profit Before Taxes
The amount of profit earned by a business after calculating the amount of income tax owned.
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.
Tangible Resources
Assets of a firm that can be easily and concretely identified.
