Terms in this set (33)
Elements of the S-C-P Model
Structure, conduct, performance
Types of competition (4)
monopolistic (excessive possession of trade or service)
oligopoly ( limited competition, in which a market is shared by a small number of producers or sellers)
monopoly (the exclusive possession or control of the supply or trade in a commodity or service)
The notion that some firms are more skilled than others in a given activity
When the average cost of production decreases as the number of units increase
economies of scale
set of sequential analysis and choices for an increase of likely hood of competitive advantage
strategic management process
2 broad categories of measurement used to evaluate competitive advantage
accounting and economic measures
5 bases of differentiation besides product features and reputations
1. product complexity
2. product mix
3. timing of introduction
the 4 question tool to assess a firms internal resources
VRIO (value, rarity, Imitatibility, Organization)
A type of economy that increases with cumulative growth but that does not have diminishing return with size
learning curve economy
4 factors that can make a firms resource or capability difficult to imitate
2. historical uniqueness
3. casual ambiguity
4. social complexity
A rare source of cost advantage that may be att. to ownership of a raw material such as silver or oil
diff. low- cost access to productive inputs
of the 4 questions in the VIRO framework the 2 you most important
2. costly to imitate
a difference to imitate that is built over time
ability to create more economic value than rivals
Another company product that actually increases the value of your product to a customer who already owns the product
when 2 firms have the same economic value
regardless of product characteristic differentiation strategy is always about 1 thing relative to competition
perception of higher value (increased willingness to pay)
measures tightly connected to evaluating achievement of a mission
Threats of rivalry, buyer power, supplier power, new entrants and substitutes
porters 5 forces
negative impacts of too much growth bureaucracy or logistical distance
diseconomies of scale
type of demand curve differentiators face
central characteristic that firms with different strategies seek to build in their organization
what strategy is used to lower costs below competitors as a means of gaining competitive advantage
model of a firm performance focusing on resources and capability controlled by the firm that affects competitive advantage
resources based view of firm
U-Form: Functional Structure
This organizational structure consists of a central management unit and several functionally organized departments (i.e. marketing, finance, operations, accounting).
VRIO as it applies to differentiation
VRIO is a way of determining a firm's competitive advantage (of a resource) over others, by asking 4 questions. (Value, Rarity, Imitability, Organization).
Differentiation has three types (product attributes, firm-customer relationship, firm linkages) and they all seek to increase willingness to pay
What is the resource-based view of the firm
The resource-based view of the firm is a model of firm performance that focuses on the resources and capabilities controlled by a firm as sources of competitive advantage
Strategic Management Process
a sequential set of analyses that can increase the likelihood of a firm's choosing a strategy that a firm will choose a good strategy; that is, a strategy that generates competitive advantage
Resource Mobility vs Resource Mobility
Resource Mobility- The ability to move resources from one part of a business to another, or from one geographical region to another.
Resource Heterogeneity- pertains to whether a firm owns a resource or capability that is also owned by numerous other competing firms, then that resource cannot provide a competitive advantage.
Economics of Scope
when money is saved by producing more than one distinct good versus producing them separately
Core Elements of a good strategy
1. Identify the problem.
2. Specify a policy for addressing the problem.
3. Determine a specific set of actions based on the previously determined policy.
four important barriers to entry
economies of scale,
cost advantages independent of scale,
government regulation of entry
What are some of the conditions that are associated with historical uniqueness?
Low-Cost Access, First-Mover Advantage
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