Strategic Management: Terms and Concepts, Quizzes of Strategic Management

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TERM 1 strategy DEFINITION 1 plan for accomplishing something with resources;create value and gain competitive advantage TERM 2 Strategic Management Process DEFINITION 2 Step 1: Analyze strategic inputs (evaluate landscape)Step 2: Take strategic action (vision; mission)Step 3: Realize Strategic outcomes (predict) TERM 3 above average returns DEFINITION 3 returns above what was expected by investors TERM 4 I/O Model DEFINITION 4 external environment is primary determinant of a firm's strategic actions;the industry in which a company chooses to compete has a stronger influence on performers that do the choices managers make inside their organizations;cost- leadership strategy or differentiation strategy TERM 5 Resource-Based Model DEFINITION 5 a firm's unique resources and capabilities are the critical link to strategic competitiveness; internal environment focus;assumes each organization is a collection of unique resources and capabilities and UNIQUENESS of its resources and capabilities is the basis for a firm's strategy and ability to earn above-average returns;enter an industry in which you have competitive advantages TERM 6 competitive advantage DEFINITION 6 valuablerareinimitablenot-substitutable;competitive advantages change over time TERM 7 vision DEFINITION 7 picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve TERM 8 mission DEFINITION 8 specifies the business(es) in which the firm intends to compete and the customers it intends to serve;how a business will carry out a vision TERM 9 stakeholders DEFINITION 9 people who are attracted by a firm's performance & who have claims on the firm's performance TERM 10 capital market stakeholders DEFINITION 10 shareholders; banks; suppliers of CAPITAL TERM 21 strategic group DEFINITION 21 collection of firms that follow similar strategies along similar dimensions;competitive rivalry is higher within a strategic group than between TERM 22 competitor analysis DEFINITION 22 informs the firm about objectives, strategies, assumptions, and capabilities of COMPETITORS;examines COMPLEMENTORS that sustain a competitor's strategy and major networks/alliances in which competitors participate;attempts to id & carefully monitor major actions take by firms w/ performance BELOW the industry norm;"If I do ______, how will my competitor(s) respond?" TERM 23 sustainability DEFINITION 23 rate of core competency obsoletion (typewriter-- >computer) availability of substitutes (other org.'s replaces yours) imitability TERM 24 core competency DEFINITION 24 not the product, but the expertise, or technology behind it;tangible or intangible;combine tangible & intangible to create VRIO TERM 25 human capital DEFINITION 25 most significant competitive advantage of all;allow people to operate; want unique people; intangible knowledge/experiences TERM 26 VRIS DEFINITION 26 valuable rare inimitable non-substitutable I & S caused by unique historical context, social complexity, and causal ambiguity TERM 27 outsourcing DEFINITION 27 improves business focus;gain access to world-class capabilities;accelerate re-engineering benefits;share risks;free resources up for other purposes;seek greatest value;evaluate resources and capabilitiesSPECIALIZATIONrisk: with outsourcing comes increased bureaucratic costs and less quality control TERM 28 Icarus Paradox DEFINITION 28 a company becomes so specialized and inner-directed based on past success that it loses sight of market realities;examples: Craftsmen: TI (engineering for engineering's sake) Builders: ITT (diversification) Pioneers: Wang Labs (innovation) Salesmen: Chrysler, P&G (sell anything) TERM 29 business-level strategy DEFINITION 29 an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets;provides PURPOSE and gives DIRECTION TERM 30 customers DEFINITION 30 foundation of successful strategies;achieve competitiveness through value perceived by customers;WHO: are the customer groups to be served?WHAT: needs do those customers have that we will satisfy?HOW: can the firm use its core competencies is satisfy needs? TERM 31 business level strategies DEFINITION 31 generic because they can be done by any organization in any industry; cost-leadership differentiation integrated cost-leadership/differentiation focused cost-leadership focused differentiation TERM 32 Cost-leadership Strategy DEFINITION 32 low-cost broad target standardized products for typical customers efficiency focus to maintain low costs examples:southwest airlines,HEB,Old Navy,Subway,Costco,Walmartrisks: loss of competitive adv. to new tech.; failure to detect needs; competitors imitate advantage TERM 33 Differentiation Strategy DEFINITION 33 advantage=uniqueness;sell a lifestyle broad target different/valued features premium price examples: Harley Davidson, Apple, Sewell (service), Old Spicerisks: customers decide product not worth premium price; can't sufficiently differentiate; similar products offered at lower cost; counterfeiters offer a knockoff (Rolex-->Rilex) TERM 34 Focus Strategies DEFINITION 34 narrow target serve the needs a particular competitive SEGMENT examples: Dr. Pepper 10, Chi flatirons, Titleistrisks: competitor focuses even more narrowly; industry-wide competitors decided to focus on specific segments; difference reduced between needs of specific segment and entire industry TERM 35 Integrated Cost-Leadership/Differentiation Strategy DEFINITION 35 provide relatively low-cost products with valued differentiated features use primary and support activities to produce differentiated products relatively low costs examples: Ikea, TX Roadhouse, Scion automobilesrisks: stuck in the middle; produces products that lack sufficient low cost or sufficient differentiation