Business Policy

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Terms in this set (...)

Strategic Competitiveness
A firm successfully formulates and implements a value creating strategy
Strategy
integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage
Competitive advantage
A firm implements a strategy that creates superior value for customers
Above Average Returns
Returns in excess of what an investor expects to earn from other investments with similar risk
Risk
An investors uncertainty about the economic gains or losses that will result from a particular investment
Average Returns
Returns are equal to what ab investor expects to earn from other investments with similar risk
Strategic Management Process
Full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above average
Hypercompetition
Competition that is excessive that it creates inherent stability and necessitates constant disruptive change for firms ion the competitive landscape
Global Economy
one in which goods, services, people, skills, and ideas move freely across geographic borders.
Globalization
increasing economic interdependence among countries and their organizations reflected in the flow of goods and services
Technology Diffusion
Speed at which new technology became available and are used
Disruptive technologies
Technology that destroy the value of an existing one and creates new markets
Information Age
Created the ability to effectively and efficiently access and use information
Increasing Knowledge Intensity
A strong knowledge base is necessary to create innovations
Strategic Flexability
Set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.
External Environment
General, industry, and competitor (Resources)
An attractive industry
industry Structural characteristics suggest above average returns (Capabilities)
Assets and skills
Things required to implements your chosen strategy
Strategy Formulation
Selection of a strategy linked with above average returns in an industry (Competitive Advantage)
Superior Returns
Earning Above average returns
Vision
Picture of what the firm wants to be and wants to achieve
Mission
Specifies the business in which the firm intends to compete and customers it intends to serve
Stakeholders
individuals, groups, and organizations which can affects a firms vision and mission
Capital Market Stakeholders
Shareholders, suppliers of capital
Product Market Stakeholders
Primary customers, suppliers, host communities, and unions
Organizational stakholders
Employees, managers
Strategic Leaders
People located in different areas and levels of the firm using the strategic management process to select strategic actions that help a firm achieve its vision
Organizational Culture
Complex set of ideologies, symbols, and core values that are shared throughout a firm and effects how the firm does business
General Environment
Composed of dimensions in the broader society that influence an industry and the firms within it.
Industry environment
Set of factors that directly influence a firm and its competitive actions and responses: Threat of new entrants, power of suppliers, power of buyers, threat of substitutes, and intensity of rivalry.
Opportunity
condition in the general environment that, if exploited, helps a company reach strategic competitiveness.
Threat
Condition in the general environment that may hinder a company's efforts to achieve strategic competitiveness.
Demographic Segment
concerned with a population size, age structure, geographic distribution, ethnic mix, and income distribution
Economic Environment
refers to the nature and direction of the economy in which a firm may want to compete
Political/legal segment
the arena in which organizations compete for attention resources and a voice in overseeing the laws and regulations guiding interactions among nations and between firms
Sociocultural Segment
Concerned with society's attitudes and cultural values
Technological segment
includes the institutions and activities involved in creating new knowledge and translating that into new outputs.
Global Segment
Includes relevant new global markets, existing markets that are changing, political events, and crucial characteristics of global markets
Sustainable physical Environment Segment
refers to the potential and actual change in the physical environment and business practices to create a sustainable environment
Industry
Group of firms producing products which are close substitutes
Economies of scale
Derived from incremental efficiency improvements through experience
Strategic group
Set of firms emphasizing similar strategic dimensions and using a similar strategy
Competitor intelligence
set of data information the firm gathers to better understand and anticipate competitors objective
Complementors
companies that sell complimentary goods or services that are compatible with the local firms good or service
Four Criteria of sustainable advantage
Valuable, Rare, Costly to imitate, no substitution
Tangible Resources
assets which can be observes or quantified
Intangible Resources
Assets which are rooted deeply in a firms history, and are difficult to imitate
Valuable capabilities
Allow a firm to exploit opportunities or neutralize threats in external environment
Rare Capabilities
Capabilities which few if any firms possess
Costly-to-imitate capabilities
Capabilities which other firms cannot easily develop
Nonsubstitutable Capabilities
Capabilities which do not have strategic equivalents
Value Chain Activities
Activities or tasks the firm completes in order to produce products and sell, distribute, and service them to create value to customers
Supportive Functions
Include activities or tasks the firm completes in order to support the work being done to produce, sell, distribute, and service products
Outsourcing
Purchase of a value-creating activity or a support function activity from an external supplier
Business Level strategy
integrated and coordinated set of actions the firms uses gain competitive advantage by exploiting core competencies
Market Segmentation
Process used to cluster people with similar needs into individual and identifiable groups
Cost Leadership
Lowest cost, Broad Market
Features acceptable at lowest cost
Differentation
Distinctiveness, Broad market
Customers perceive acceptable cost but different in ways which are important to them
Focused cost leadership
Low cost, Narrow market
Produces goods/services which serve needs of particular segment
Focused Differentation
Distinctiveness, Narrow Market
involves engaging in primary value chain activities and support functions that allow a firm to peruse a low cost/ differentiation strategy
Total Quality Management
Managerial process that emphasizes an organizations commitment to the customer and to continuous improvement of all processes through problem solving approaches
Competitors
Firms operating in the same market, offering similar products, and targeting similar customers
Competitive rivalry
Ongoing set of competitive actions and responses that occur among firms
Competitive behavior
Set of competitive actions/responses a firm takes to build or defend its competitive advantage
Multi-market competition
Occurs when firms compete against each other in several product or geographic markets
Market commonality
concerned with the number of markets in which firms and competitor are jointly involved and the degree of importance
Resource similarity
extent to which tangible and intangible resources are comparible to a competitors in type and amount
Competitive action
Strategic or tactical action the firms takes to build or defend its advantage
Strategic Response
Market based move which involves a significant commitment of organizational resources
Competitive response
A strategic action the firm takes to counter the effects of a competitors competitive action
Tactical Response
Move that is taken to fine tune a strategy (less resources)
Slow cycle market
markets in which firms competitive advantage are shielded from imitation.
Fast cycle markets
markets in which the firms capabilities that contribute to competitive advantages aren't shielded from imitation . imitation is often rapid and inexpensive
Standard cycle markets
markets in which the competitive advantages are partially shielded from imitation and is moderately costly to imitate
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