Chapter 1

In the external analysis phase of the AFI strategy framework, managers should ask

"How do external forces affect our strategy and competitive advantage?"

Stakeholders impact analysis is a decision tool designed to

Achieve a competitive & act as a good corporate citizen

competitive parity

Achieving the standard or average results as compared to others within the industry

AFI Framework

Analysis, Formulation, Implementation (5 step process)

What elements comprise strategic management?

Analysis, Formulation, and Implementation

competitive advantage

Assessed relative to other competitors in the industry

When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved

Competitive advantage

strategy

Set of actions a firm takes to achieve a competitive advantage

Strategic Management

The field of management that focuses on attaining competitive advantage by combing analysis, formulation, and implementation

Stakeholders impact analysis

1. Id stakeholders 2. Recognize stakeholders' interests and claims 3. Opportunities & threats 4. Economic, legal, & philanthropic responsibilities for stakeholders 5. Effectively address the stakeholders concerns

Which of the four csr is considered first and foremost for business enterprises

Economic

Which of csr elements are required by society?

Economic & legal responsibilities

Governments, unions, and customers

External stakeholders

Managers have ________ resources in their quest for competitive advantage

Limited

Sustainable competitive advantage exists when a firm

Maintains superior performance relative to its industry over a long period of time

Goals of a stakeholders strategy

Manage various stakeholders effectively & gain and sustain competitive advantage

Why do new companies underperform in comparison to their competitors?

Start ups often lose money early on

Effective guiding policy is supported by and stays consistent through the use of

Strategic commitments

Trade offs

Two conflicting strategic options

A well devised strategy is about which two things

What to do and what not to do

Legitimate claim

When needs of a firm are within the bounds of the law OR are otherwise relevant to the firm

The overall purpose of a firm's strategy is

to perform better than other companies in the same industry

Stakeholder strategy

A firms attempt to web relationships between internal and external stakeholders in order to create value

If a firm has a 10% roi while industry average is 18% the firm has

Competitive disadvantage

What legal developments allow business to function as an institution

Contact enforcement & property rights

What must a firm do after diagnosing it's specific competitive challenge?

Create an effective guiding policy

Primary strategic objectives

Creative value & controlling costs

What topics should be considered during the analysis phase of AFI framework?

External environment and associated challenges Firm's business model and competitive advantages Role of strategic leadership and the strategy process Firm's internal strengths and resources

Corporate Social Responsibility (CSR)

Guides firms in identifying & addressing their economic, legal,ethical, and philanthropic obligations to society

Corporate citizenship

Idea that firms should voluntarily give back to society when they are able to do so

What is a sign indicating investors expect future growth?

Increasing value of company stock

Employees, board members, stockholders

Internal stakeholders

Effective guiding policy

Overall approach chosen to overcome obstacles identified in diagnosis

The expectations that society has toward business, in contrast to what society requires, result in in which elements of the pyramid of csr?

Philanthropic & ethical responsibilities

Competitive disadvantage

When a firm performs below the industry average or is outperformed by competitors