Understanding Business Strategy CH 1 – Flashcards
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strategic management
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the ongoing process companies use to form a vision, analyze their external environment and their internal environment, and select one or more strategies to use to create value for customers and other stakeholders, especially shareholders
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vision
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contains at least two components-a mission that describes the firm's DNA and the "picture" of the firm as it hopes to exist in a future time period
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strategy
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an action plan designed to move an organization toward achievement of its vision
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mission
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defines the firm's core intent and the business or businesses in which it intends to operate
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external environment
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a set of conditions outside the firm that affect the firm's performance
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internal environment
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the set of conditions (such as strengths, resources, capabilities, and so forth) inside the firm affecting the choice and use of strategies
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strengths
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resources and capabilities that allow the firm to complete important tasks
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resources
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the tangible and intangible assets held by a firm
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capabilities
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result when the firm integrates several different resources to complete a task or series of related tasks
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core competencies
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capabilities the firm emphasizes and performs especially while pursuing its vision
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distinctive competencies
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core competencies that differ from those held by competitors
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comparative advantage
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when the firm's core competencies allow it to create value for customers by performing a key activity better than competitors or when a distinctive competence allows it to perform an activity that creates value for customers that competitors can't perform
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strategy implementation
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the set of actions firms take to use a strategy after it has been selected
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opportunites
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conditions in the firm's external environment that may help the firm reach it's vision
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threats
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conditions in the firm's external environment that may prevent the firm from reaching its vision
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stakeholders
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individuals and groups who have an interest in a firm's performance and an ability to influence its actions
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strategic leaders
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the individuals practicing leadership
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organizational culture
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the set of value and beliefs that are shared throughout the firm
