Define Vision: 

(Ch. 1)

A picture of what the firm wants to be and what the firm ultimately wants to achieve

Define Mission: 

(Ch. 1)

Specifies the businesses in which the firm intends to compete and the customer it intends to serve

Explain the Industrial Organization and Resource-Based models of above-average returns:

(Ch. 1)

Industrial Organization Model: External, find attractive industry and develop/acquire skills and assets needed to generate above-average returns

Resource-Based Model: Internal, identify firm's strengths, locate attractice industry that utilizes firm's resources 

What are the 5 forces?

(Ch. 2)

Buyers

Rivalry

New Entrants

Suppliers

Substitutes

Explain the difference between an attractive vs. an unattractive industry:

(Ch. 2)

Attractive: High Profit Potential

• High Entry Barriers
• Weak Suppliers/Buyers
• Few substitutes
• Moderate rivalry

Unattractive: Low Profit Potential

• Low Entry Barriers
• Strong Suppliers/Buyers
• Strong substitutes
• Intense rivalry

What are Strategic Groups?

(Ch. 2)

A set of firms emphasizing similar dimensions and using similar strategies

Competition within > Competition among

What is a Generic Strategy?

(Ch. 4)

What are 5 Generic Strategies?

(Ch. 4)

1. Cost Leadership
2. Focused Cost Leadership
3. Differentiation
4. Focused Differentiation
5. Integrated Cost Leadership/Differentiation

SWOT explains:

(Ch. 2)

Strengths

Weaknesses

Opportunities

Threats

Explain what "fit" or "match" means:

(Ch. 2-3)

Explain the relationship between resources, capabilities and competencies:

(Ch. 3)

RESOURCES create CAPABILITIES for the firm that result in CORE COMPETENCIES that the firm capatilizes on in order to achieve above-average returns in an industry.

Core Competencies are your advantages that set you apart from other businesses.

Just because a firm is CAPABLE of doing something does NOT mean it is its strength, or it is the best at it; i.e. it is NOT a core competency.

What are the 4 Criteria of Sustainable Competitive Advantage?

(Ch. 3)

Capabilities must filfill FOUR criteria in order to be CORE COMPETENCIES:

1. Valuable
2. Rare
3. Costly to Imitate
4. Nonsubstitutable

Explain a Value Chain:

(Ch. 3)

What is a sustainable competitive advantage?

(Ch. 3)

Exists only when competitors cannot duplicate the benefits of a firm's strategy or, when they lack the resources to attempt the imitation.

Review the Porsche Case!

(Ch. 3)

The firms product or service commands a premium price due to its differentiation as compared to competitors because customers perceive it as unique or special.

What are some Value Chain activities?

(Ch. 3)

SCM-->Operations-->Distribution-->Marketing-->After Sales

Explain a target market/focus:

(Ch. 4)

Developing goods to serve a particular competitive segment.

Market segmentation includes: demographic, geographic, psychological, etc.

Explain the Cost Leadership strategy:

(Ch. 4)

A firm competes on efficiency: positions its product in an industry to still be valued, but place more value on the lower price. The product is more efficient, thus allowing a lower price.

Broad Market = "  "

Narrow Market = "  "

Broad = "Industry-wide"

Narrow = "Niche"

A firm attmepts to provide great quality, uniqueness, and low cost. This strategy maximizes value for the firm by driving down costs while still being able to demand higher prices.

You're neither a cost leader nor provide premium quality.

It's too risky to attempt a Integrated Cost Leadership/Differentiation strategy because products do not offer sufficient value in terms of either low cost or differntiation

Risks associated with Differntiation Strategy:

(Ch. 4)

Risks associated with a Cost Leadership strategy:

(Ch. 4)

Risks associated with a Focused Strategy:

(Ch. 4)

Review Generic Strategies Risks Slides:

(Ch. 4)

When two firms have high market commonality and high resrouce similarity.

Direct competition does NOT always mean intense rivalry.