Bus 401 Exam one

Internal Stakeholders

internal stakeholders include stockholders, employees (including executives, managers, and workers)

A complement

is a product, service, or competency that adds value to the original product offering when the two are used in tandem.

Stakeholder strategy

is an integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage

A strategic initiative

is any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures

complementor

is the Frim that helps you out like google give samsung anroid

legal

legal factors include the official outcomes of political processes as manifested in laws, mandates, regulations, and court decisions

A core values statement

matters because it provides touchstones for the employees to understand the company culture. It offers bedrock principles that employees at all levels can use to deal with complexity and to resolve conflict. Such statements can help provide the organization's employees with a moral compass.

stakeholders

organizations, groups, and individuals that can affect or be affected by a firm's actions.

Building on the vision, organizations establish a mission

which describes what an organization actually does—that is, the products and services it plans to provide, and the markets in which it will compete.

•Oligopoly (e.g., express mail, soft drinks, credit cards)

ØFew large firms, interdependent, high entry barriers ØPricing power depends on degree of differentiation ØTendency towards non-price competitio

•Monopolistic Competition (e.g., restaurants, lodging)

ØMany firms, medium entry barriers ØDifferentiated products, pricing power depends on degree of differentiation

•Perfect Competition (e.g., pet supply stores, rice)

ØMany small firms, low entry barriers ØCommodity products, little pricing power

•Monopoly (e.g., electric utilities)

ØOne firm, often government approved, high entry barriers ØPricing power ØNear monopolies are more common

PESTEL Analysis

•A starting point for thinking about threats and opportunities from these macro-external factors •In some cases, firms shape these as well as being shaped by them

Economical

▪ Growth rates. ▪ Levels of employment. ▪ Interest rates. ▪ Price stability (inflation and deflation). ▪ Currency exchange rates.

The competitive industry structure refers to elements and features common to all industries. The structure of an industry is largely captured by

▪ The number and size of its competitors. ▪ The firms' degree of pricing power. ▪ The type of product or service (commodity or differentiated product). ▪ The height of entry barriers

strategic group,

, a set of companies that pursue a similar strategy within a specific industry in their quest for competitive advantage

dynamic capabilities perspective

, competitive advantage is the outflow of a firm's capacity to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment.

illusion of control

, which describes a tendency by managers to overestimate their ability to control events. Hard numbers in a strategic plan can convey a false sense of security.

Portar 5 Forces

1) Threat of new entrant 2) threat of substitute 3) threat of suppliers 4) threat of buyers 5) threat of rivalry

Stakeholder impact analysis

A decision tool with which managers can recognize, prioritize, and address the needs of different stakeholders, enabling the firm to achieve competitive advantage while acting as a good corporate citizen.

1)

A diagnosis of the competitive challenge. This element is accomplished through analysis of the firm's external and internal environments (Part 1 of the AFI framework).

2

A failure to face a competitive challenge is not strategy. If the firm does not define a clear competitive challenge, managers have no way of assessing whether they are making progress in addressing it.

top-down strategic planning

A rational, data-driven strategy process through which top management attempts to program future success.

3)

A set of coherent actions to implement the firm's guiding policy. This element is accomplished through strategy implementation (Part 3 of the AFI framework).

social complexity A situation in which different social and business systems interact with one another.

A situation in which different social and business systems interact with one another.

Strategic Management

An integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. is the integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.

resource heterogeneity .

Assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms like south west and alsaka airline

no competitive advantage can be sustained indefinitely. Several conditions, however, can offer some protection to a successful firm by making it more difficult for competitors to imitate the resources, capabilities, or competencies that underlie its competitive advantage

Better expectations of future resource value. ▪ Path dependence. ▪ Causal ambiguity. ▪ Social complexity. ▪ Intellectual property (IP) protection.

ecological

Ecological factors involve broad environmental issues such as the natural environment, global warming, and sustainable economic growth. Organizations and the natural environment coexist in an interdependent relationship.

entry barriers

Economies of scale. Economies of scale. ▪ Network effects. ▪ Customer switching costs. ▪ Capital requirements. ▪ Advantages independent of size. ▪ Government policy. ▪ Credible threat of retaliation.

•Strategy

Goal-directed actions taken to gain and sustain a competitive advantage Theory of how to compete

1

Grandiose statements are not strategy. You may have heard firms say things like, "Our strategy is to win" or "We will be No. 1." Twitter declared its "ambition is to have the largest audience in the world." Such statements of desire, on their own, are not strategy.

INTELLECTUAL PROPERTY PROTECTION.

Intellectual property (IP) protection is a critical intangible resource that can also help sustain a competitive advance. Consider the five major forms of IP protection: patents, designs, copyrights, trademarks, and trade secrets.32

strategic management process

Method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage

Intangible Resources

No physical attributes Competitive advantage is more likely derived from intangibles

Entry barriers

Obstacles that determine how easily a firm can enter an industry and often significantly predict industry profit potential.

valuable resource

One of the four key criteria in the VRIO framework. A resource is valuable if it helps a firm exploit an external opportunity or offset an external threat. In particular, a valuable resource enables a firm to increase its economic value creation (V - C). Revenues rise if a firm is able to increase the perceived value of its product or service in the eyes of consumers by offering superior design and adding attractive features (assuming costs are not increasing). If no it will result in competitive disadvantage

3

Operational effectiveness, competitive benchmarking, or other tactical tools are not strategy.

core competencies are made up of

Resources are any assets such as cash, buildings, machinery, or intellectual property that a firm can draw on when crafting and executing a strategy. Resources can be either tangible or intangible. Capabilities are the organizational and managerial skills necessary to orchestrate a diverse set of resources and to deploy them strategically. Capabilities are by nature intangible. They find their expression in a company's structure, routines, and culture.

socicultural

Sociocultural factors capture a society's cultures, norms, and values.

BETTER EXPECTATIONS OF FUTURE RESOURCE VALUE.

Sometimes firms can acquire resources at a low cost, which lays the foundation for a competitive advantage later when expectations about the future of the resource turn out to be more accurate.

scenario planning

Strategy-planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.

black swan events

Such events were considered to be highly improbable and thus unexpected, but when they did occur, each had a very profound impact.

competitive advantage

Superior performance relative to competitors or industry avg.

Technological

Technological factors capture the application of knowledge to create new processes and products.

Organized to capture value

The final criterion of whether a rare, valuable, and costly-to-imitate resource can form the basis of a sustainable competitive advantage depends on the firm's internal structure. To fully exploit the competitive potential of its resources, capabilities, and competencies, a firm must be organized to capture value—that is, it must have in place an effective organizational structure and coordinating systems.

Strategic position

The important point here is that strategy is about creating superior value, while containing the cost to create it

intended strategy

The outcome of a rational and structured top-down strategic plan.

strategy formulation

The part of the strategic management process that concerns the choice of strategy in terms of where and how to compete.

core competencies

These are unique strengths, embedded deep within a firm. Core competencies allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost.

VRIO Framework

Valuable Rare costly to Imitate. And finally, the firm itself must beOrganized to capture the value of the resource.

Tangible resources

Visible, physical attributes

. Activities

are distinct and fine-grained business processes such as order taking, the physical delivery of products, or invoicing customers. Each distinct activity enables firms to add incremental value by transforming inputs into goods and services. In the interplay of resources and capabilities, resources reinforce core competencies, while capabilities allow managers to orchestrate their core competencies.

resource stocks

are the firm's current level of intangible resources.

Resource flows

are the firm's level of investments to maintain or build a resource. A helpful metaphor to explain the differences between resource stocks and resource flows is a bathtub that is being filled with water

Firm effects

attribute firm performance to the actions managers take. 55%+ percent performance

isolating mechanisms

because they prevent rivals from competing away the advantage a firm may enjoy.

A vision

captures an organization's aspiration and spells out what it ultimately wants to accomplish. An effective vision pervades the organization with a sense of winning and motivates employees at all levels to aim for the same target, while leaving room for individual and team contributions.

Corporate strategy

concerns questions relating to where to compete in terms of industry, markets, and geography.

strategy implementation

concerns the organization, coordination, and integration of how work gets done.

Business strategy

concerns the question of how to compete. Three generic business strategies are available: cost leadership, differentiation, or value innovation.

Functional strategy

concerns the question of how to implement a chosen business strategy.

A product-oriented vision

defines a business in terms of a good or service provided. Product-oriented visions tend to force managers to take a more myopic view of the competitive landscape.

A customer-oriented vision

defines a business in terms of providing solutions to customer needs.

dynamic capabilities

describe a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage.

Industry effects

describe the underlying economic structure of the industry. 20% of profitability depends on industry it's in.

Path dependence path dependence

describes a process in which the options one faces in a current situation are limited by decisions made in the past. Often, early events—sometimes even random ones—have a significant effect on final outcomes

casual ambiguity

describes a situation in which the cause and effect of a phenomenon are not readily apparent. To formulate and implement a strategy that enhances a firm's chances of gaining and sustaining a competitive advantage, managers need to have a hypothesis or theory of how to compete.

An emergent strategy

describes any unplanned strategic initiative bubbling up from the bottom of the organization.

resource immobility

describes the insight that resources tend to be "sticky" and don't move easily from firm to firm. Because of that stickiness, the resource differences that exist between firms are difficult to replicate and, therefore, can last for a long time.

threat of entry

describes the risk that potential competitors will enter the industry.

The upper-echelons theory

favors the idea that strong leadership is the result of both innate abilities and learning.

2)

guiding policy to address the competitive challenge. This element is accomplished through strategy formulation, resulting in the firm's corporate, business, and functional strategies (Part 2 of the AFI framework).

costly to imitate

if firms that do not possess the resource are unable to develop or buy the resource at a reasonable price. if no temporary competitive advantage

Rare

if only one or a few firms possess it. A resource that is valuable but not rare can lead to competitive parity at best.

Value creation

in turn lays the foundation for the benefits that successful economies can provide: education, public safety, and health care, among others.

External Stakeholders

include customers, suppliers, alliance partners, creditors, unions, communities, governments at various levels, and the media.

strategic position

relates to its ability to create value for customers (V) while containing the cost to do so (C). Competitive advantage flows to the firm that is able to create as large a gap as possible between the value the firm's product or service generates and the cost required to produce it (V - C).

Political

through lobbying, public relations, contributions, litigation, and so on, in ways that are favorable to the firm.