Bus 4385 / Strategic Management Exam 1 (Ch. 1-4)

Nonsubstitutable Capabilities

capabilities that do not have strategic equivalents

Rare Capabilities

capabilities that few, if any, competitors possess

Costly to Imitate Capabilities

capabilities that other firms cannot easily develop

Core Competencies

capabilities that serve as a source of competitive advantage for a firm over its rivals

Complementors

companies or networks of companies that sell complementary goods or services that are compatible with the focal firm's good or service

General Environment

composed of dimensions in the broader society that influence an industry and the firms within it

Demographic Segment

concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution

Sociocultural Segment

concerned with a society's attitudes and cultural values

Threat

condition in the general environment that may hinder a company's efforts to achieve strategic competitiveness

Strategic Group

a set of firms emphasizing similar strategic dimensions and using a similar strategy

Business Level Strategy

an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets

Differentiation Strategy

an integrated set of actions taken to produce goods or services (at an acceptable cost) that customers perceive as being different in ways that are important to them

Cost Leadership Strategy

an integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost, relative to that of competitors

Risk

an investor's uncertainty about the economic gains or losses that will result from a particular investment

Integrated Cost Leadership/Differentiation Strategy

involves engaging in primary value-chain activities and support functions that allow a firm to simultaneously pursue low cost and differentiation

Sustainable Physical Environment Segment

refers to potential and actual changes in the physical environment and business practices that are intended to positively respond to those changes with the intent of creating a sustainable environment

Organizational Culture

refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business

Tangible Resources

assets that can be observed and quantified

Capability

the capacity for a set of resources to perform a task or an activity in an integrative manner

Strategic Management Process

the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns

Globalization

the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders

Stakeholders

the individuals, groups, and organizations that can affect the firm's vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm's performance

Outsourcing

the purchase of a value-creating activity or a support function activity from an external supplier

Competitor Intelligence

the set of data and information the firm gathers to better understand and anticipate competitors' objectives, strategies, assumptions, and capabilities

Industry Environment

the set of factors that directly influences a firm and its competitive actions and responses: the threat of new entrants, the power of buyers, the power of suppliers, threat of product substitutes, and the intensity of rivalry among competing firms

Vision

a picture of what the firm wants to be and, in board terms, what it wants to ultimately achieve

Market Segmentation

a process used to cluster people with similar needs into individual and identifiable groups

Valuable, Rare, Costly to imitate, Nonsubstitutable

4 Criteria of Sustainable Competitive Advantage

Opportunity

a condition in the general environment that, if exploited effectively, helps a company reach strategic competitiveness

Industry

a group of firms producing products that are close substitutes

Total Quality Management (TQM)

a managerial process that emphasizes an organization's commitment to the customer and to continuous improvement of all process through problem-solving approaches based on empowerment of employees

Strategic Competiveness

achieved when a firm successfully formulates and implements a value creating strategy

Value Chain Activities

activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers

Valuable Capabilities

allow the firm to exploit opportunities or neutralize threats in its external environment

Strategy

an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage

Intangible Resources

assets that are rooted deeply in the firm's history, accumulate over time, and are relatively difficult for competitors to analyze and imitate

Hypercompetition

describes competition that is excessive such that it creates inherent instability and necessitates constant disruptive change for firms in the competitive landscape

Competitor Analysis

how companies gather and interpret information about their competitors

Support Functions

include the activities or tasks the firm completes in order to support the work being done to produce, sell, distribute, and service the products the firm is producing

Global Segment

includes relevant new global markets, existing markets that are changing, important international political events, and critical cultural and institutional characteristics of global markets

Technological Segment

includes the institutions and activities involved in creating new knowledge and translating that knowledge into new outputs, products, processes and materials

Resources

inputs into a firm's production process such as capital equipment, the skills of individual employees, patents, finances, and talented managers

Focus Strategy

integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment

Value

measured by a product's performance characteristics and by its attributes for which customers are willing to pay

Strategic Leaders

people located in different areas and levels of the firm using the strategic management process to select strategic actions that help the firm achieve its vision and fulfill its mission

Economic Segment

refers to the nature and direction of the economy in which a firm operates

Average Returns

returns equal to those an investor expects to earn from other investments with a similar amount of risk

Above-Average returns

returns in excess of what an investor expects to earn from other investments with a similar amount of risk

Strategic Flexibility

set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

Mission

specifies the businesses in which the firm intends to compete and the customers it intends to serve

Global Mind-Set

the ability to analyze, understand and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context

Political/Legal Segment

the arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding interactions among nations as well as between firms and various local governmental agencies

Competitive Advantage

what a firm has when it implements a strategy that creates superior value for customers and that competitors are unable to duplicate or find it too costly to try to imitate

Global Economy

where goods, services, people, skills, and ideas move freely across geographic borders