Business Policies

Formulation and Implementation

The two types of strategic actions that must be simultaneously integrated to successfully employ the strategic management process

Non- Substitutable

They are non-substitutable when they have no structural equivalents

Rare

They are rare when possessed by few, if any current and potential competitors

Business-level strategy

is concerned with determining the businesses in which the company intends to compete as well as how to manage its different businesses.

Vision Statement

is short and concise, making it easy to remember

Differentiation Strategy

producing differentiated goods or services for which customers are willing to pay a price premium

Technology

rapid technological changes

Above-average returns

are earned when firms are able to effectively study the external environment as the foundation for identifying an attractive industry and implementing the appropriate strategy

Strategy

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

Two Drivers of Hyper Competition?

Globalization and Technology

What are the 5 characterizations of Hyper competition?

1. Market instability and change 2. Rapidly escalating competition 3. Aggressive challengers 4. Strategic maneuvering to establish first-mover advantage 5. Technology industry

Stakeholder Priorities

1. Power 2. Urgency 3. Importance

Four Components the Resource Based Model

1. Resources 2. Capabilities 3. Core Competencies 4. Competitive Advantage

Five force model includes:

1. Suppliers 2. Buyers 3. Competitive rivalry 4. Product Substitutes 5. Potential entrants to the industry

Three Categories for Technology Trends

1. Technology Diffusion and Disruptive Technologies 2. Information Age 3. Increasing Knowledge Intensity

Industry Boundaries Blurring

EX: Computer networks and telecommunications have blurred the boundaries of the entertainment industry

An attractive industry is one that is characterized by high entry barriers, suppliers and buyers with strong bargaining power, low threats for substitute products and low rivalry among firms.

False

Bargaining power of buyers increases when the industry's products are differentiated

False

Buyer power increases when switching costs are high

False

Compared with the industry environment, the general environment has a more direct effect on the firms strategic competitiveness.

False

Firms can directly control the elements of the seven segments of the general environment

False

Industry incumbents want to maintain low entry barriers in order to discourage potential competitors from entering the industry

False

Resources are considered rare when they have no structural equivalent

False

Scanning involves detecting meaning through early signals of environmental trends

False

The O/I model assumes that the uniqueness of a firm's resources and capabilities are its main source of above-average returns

False

The degree to which the firm is dependent on a stakeholder group gives that stakeholder less influence

False

The degree to which the firm is dependent on a stakeholder group gives the stakeholder less influence

False

Cost Leadership Strategy

Producing standardized goods or services at costs below those of competitors

Costly to imitate

Resources are costly to imitate when other firms cannot obtain them or are at a cost disadvantage

India is the world's largest democracy

True

The Five forces model expands the arena of competitive analysis beyond direct competitors to include buyers and suppliers who may also be a source of competition

True

Competitive Advantage

When a firm implements a strategy that creates superior value for customers; competitors are unable to duplicate it or find too costly to imitate it

Valuable

When they allow a firm to take advantage of opportunities or neutralize threats

Strategic Competiveness

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

Strategic leaders

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

Above Average Returns

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

Globalization

emergence of a global economy

Technological segment of the external environment

includes private and government-supported expenditures, product innovations, and applications of knowledge.

Vision

is a picture of what the firm wants to be and in broad terms, what to ultimately achieve

Strategic management process

is a rational approach firms use to achieve strategic competitiveness and earn above average returns

Rational

the approach firms use to achieve strategic competitiveness and earn above average returns