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