Principals of management
Evaluates the interconnected relationships between various actors in an industry, including competing firms, their suppliers, and their customers, by examining five forces: industry rivalry, threat of new entrants, threat of substitutes, supplier power, and buyer power.
Porter's Five Forces
a performance evaluation technique where the standard for a firm's performance is based on another firm's superior performance.
benchmarking
ways that single-product firms organize their activities to succeed against rivals; at this level, include cost leadership and differentiation.
business-level strategy
Business actions a firm undertakes to attract customers to its products and away from competitors' products.
competition
When a firm successfully attracts more customers, earns more profit, or returns more value to its shareholders than rival firms do.
competitive advantage
Factors and situations both inside the firm and outside the firm that have the potential to impact its operations and success.
competitive environment
factor that identifies political activities in the macro environment that may be relevant to a firm's operations.
political factors
the broadest level of strategy, concerned with decisions about growing, maintaining, or shrinking very large companies.
corporate strategy
A generic business-level strategy in which a firm tightly controls costs throughout its value chain activities in order to offer customers low-priced goods and services at a profit.
cost-leadership strategy
a grand strategy pursued by companies facing challenges.
defensive strategy
includes facts about the income, education, age, and ethnic and racial composition of a population.
demographics
A generic business-level strategy in which firms add value to their products and services in order to attract customers who are willing to pay a higher price.
differentiation strategy
facts (such as unemployment rates, interest rates, and commodity prices) about the state of the local, national, or global economy.
economic factors
category that examines a firm's external situation with respect to the natural environment, including pollution, natural resource availability and preservation, and alternative energy.
environmental factors
The systematic and intentional analysis of a firm's internal state and its external environment.
environmental scanning
The aspects of the world at large and of a firm's industry that can impact its operations.
external environment
Things in the world or industry environments that may impact a firm's operations or success, such as the economy, government actions, or supplier power. Strategic decisions can be made in response to these things but normally cannot directly influence or change them.
external factors
something that a firm is trying to accomplish; can also be called an objective.
goal
a grand strategy to increase the size of the firm in terms of revenue, market share, geographic reach, or a combination of these elements.
growth strategy
the execution of a strategy by planning and assigning actions to employees to carry out in order to accomplish the company's strategic objectives.
implementation
A group of firms all offering products or services in a single category, for example restaurants or athletic equipment.
industry
One of Porter's Five Forces; refers to the intensity of competition between firms in an industry.
industry rivalry
Innermost layer of a firm's competitive environment, including members of the firm itself (such as employees and managers), investors in the firm, and the resources and capabilities of a firm.
internal environment
Characteristics of a firm itself, such as resources and capabilities, that the firm can use to successfully compete against its rivals.
internal factors
the level of strategy concerned with the large-scale actions involved in entering a brand-new geographic market.
international strategy
the laws impacting business, such as those governing contracts and intellectual property rights and illegal activities, such as online piracy.
legal factors
company actions to achieve an objective that will take a year or longer to accomplish.
long-term strategic plan
a general description of how the firm will try to accomplish the firm's vision.
mission statement
first-line strategic planning consisting of specific daily and short-term actions that employees will perform to make the company function.
operational planning
Few competitors in the industry
opportunities
the evaluation of firm activities to determine the success of that activity in helping the firm reach its strategic objectives.
performance measurement
company actions to achieve an objective in a time frame of a year or less.
short-term strategic plan
category that identifies trends, facts, and changes in society's composition, tastes, and behaviors, including demographics.
sociocultural factors
a grand strategy for a company that wants maintain its current income, market share, or geographic reach.
stability strategy
Process that firms use to study and understand their competitive environment.
strategic analysis
the set of activities that firm managers undertake in order to try to put their firms in the best possible position to compete successfully in the marketplace.
strategic management process
the big-picture goals for the company: what the company will do to try to fulfill its mission.
strategic objectives
connects the company's actions back to its vision and mission statements.
strategic planning
Firm's decisions on how to organize its actions and operate to effectively serve customers and compete against rivals.
strategic positioning
things that your company does well at
strengths
mid-level strategic planning consisting of broad ideas of what a company should do to pursue its mission.
tactical planning
category that includes factors such as the Internet, social media, automation, and other innovations that impact how businesses compete or how they manufacture, market, or sell their goods or services.
technological factors
Emerging competitors
threats
a broad expression of what a business's founders want that business to accomplish.
vision statement
Things that your competitors do better than you
weaknesses