Chapter 7

decline

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

boom

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

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

value chain

a collection of processes and activities a small business conducts to design, produce, market, deliver, and support its product or service.

mass market

a customer group that involve 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.

niche market

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

differentiation strategy

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

parallel competition

an imitative business that competes locally w/ others in the same industry

entry wedge

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

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

resource

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

transformational competencies

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

benefits

characteristics of a product or service that the target customer would consider worthwhile

SWOT analysis

strength, weakness, opportunity, and threat. Swot analysis is a strategic planning tool.

market

the business term for the population of customer for your product

industry

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

trade magazine

the magazines that target specific industries and professions

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.

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.

difficult to imitate

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

maturity

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.

retrenchment

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

combinational competencies

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

introduction

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

four key decisions you make about your firm

prestrategy, benefits, strategy, competitive advantage

generic strategies

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