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
