Strategic Management (Exam 1) – Flashcards
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Chapter 1
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Chapter 1
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Strategic Competitiveness
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is achieved when a firm successfully formulates and implements a value-creating strategy
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Strategy
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an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
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Competitive Advantage
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Something a firm does better than anyone else
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Above-average returns
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returns in excess of what an investor expects to earn from other investments with a similar amount of risk
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Risk
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an investor's uncertainty about the economic gains or losses that will result from a particular investment
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Average returns
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returns equal to those an investor expects to earn from other investments with a similar amount of risk
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Strategic Management Process
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the full set of commitment, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns
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Global Economy
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goods, services, people, skills, and ideas move freely across geographic borders
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Strategic Flexibility
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a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment
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Resources
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inputs into a firm's production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers
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Capability
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the capacity for a set of resources to perform a task or an activity in an integrative manner
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Core Competencies
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Something a firm does well (act as the source for competitive advantage)
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Vision
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a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve
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Mission
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specifies the businesses in which the firm intends to compete and the customers it intends to serve
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Stakeholders
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individuals, groups, and organizations that can affect the firm's vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm's performance
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Strategic Leaders
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people located in different areas and levels of the firm using the strategic management process to select strategic actions that help the firm achieve its vision and fulfill its mission
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Organizational Culture
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refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business
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Profit Pool
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entails the total profits earned in an industry at all points along the value chain
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Chapter 2
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Chapter 2
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General Environment
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composed of dimensions in the broader society that influence an industry and the firms within it
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Industry Environment
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the set of factors that directly influences a firm and its competitive actions and responses
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Competitor Analysis
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how companies gather and interpret information about their competitors
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Opportunity
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a condition in the general environment that, if exploited effectively, helps a company reach strategic competitiveness
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Threat
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a condition in the general environment that may hinder a company's efforts to achieve strategic competitiveness
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7 Segments of General Environment
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Demographic, Economic, Political/Legal, Sociocultural, Technological, Physical Environment, Global
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Industry
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a group of firms producing products that are close substitutes
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Strategic group
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A set of firms emphasizing similar strategic dimensions and using a similar strategy
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Competitor Intelligence
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the set of data and information the firm gathers to better understand and anticipate competitors' objectives, strategies, assumptions, and capabilities
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Global mind-set
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the ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context
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Value
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the customer's perceived level of performance
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Valuable capabilities
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allow the firm to exploit opportunities or neutralize threats in its external environment
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Rare capabilities
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capabilities that few, if any, competitors possess
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Costly-to-imitate capabilities
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capabilities that other firms cannot easily develop
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Nonsubstitutable capabilities
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capabilities that do not have strategic equivalents
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Value-chain activities
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activities or tasks the firm completes in order to produce products and then sell, distribute and service those products in ways that create value for the customer
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Support activities
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activities of tasks the firm completes in order to support the work being done to produce, sell, distribute, and service the products the firm is producing
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Outsourcing
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the purchase of a value-creating activity or a support function activity from an external supplier
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Business-level strategy
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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
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Market segmentation
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the process used to cluster people with similar needs into individual and identifiable groups
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Total Quality Management (TQM)
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a system firms use to (1) increase customer satisfaction (2) cut costs, and (3) reduce the amount of time required to introduce innovative products to the market with a focus on employee empowerment.
