Term
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Definition
| is a theory about how to gain competitive advantages. |
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Term
| Describe Strategic Management Process |
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Definition
Book Figure 1.1 shows.
Missions->Objectives->External and Internal Analysis->Strategic Choice->Implementation->Advantages
In the Lecture Prof. put Objectives after Strategic Choice which makes a little sense. |
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Term
Define and Provide 2 Examples of:
Business Level Strategies |
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Definition
Gain advantage in a single market or industry.
Cost Leadership
Product Differentiation |
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Term
Define and provide examples of:
Corporate Level Strategies |
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Definition
Gain advantage in multiple markets or industries.
Vertical Integration
Diversification
Strategic Alliances
Mergers and Acquisitions
Global Strategies |
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Term
Define competitive advantage and explain its relationship to economic value creation. |
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Definition
Competitive Advantage is when a company can create more economic value than rivals.
Economic Value is the difference between perceived benefits gained by a customer and the full costs of the product or service. |
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Term
Describe two different measures of competitive advantage |
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Definition
Accounting Performance - Use ratios and analytics as a measure of competitive advantage.
Economic Performance - Compare WACC to other firms and industries as a measure of competitive advantage. |
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Term
Explain the difference between emergent and intended strategies |
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Definition
Intended Strategies begin well defined, when strategies need to be adjusted they are Emergent. |
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Term
| What are the dimensions of the general environment? |
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Definition
Technological Change
Demographic Trends
Cultural Trends
Economic Climate
Legal and Political Conditions
Specific International Events |
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Term
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Definition
Structure
Conduct
Performance
Each drives the next. |
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Term
| List Porter's Five Forces. |
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Definition
| Entrants, Suppliers, Buyers, Rivals, Substitutes (and sometimes complements). |
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Term
| What are the four generic industry structures? |
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Definition
| Fragmented, Emerging, Mature, Declining |
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Term
| What are some opportunities in an fragmented industry? |
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Definition
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Term
| What are some opportunities in an emerging industry? |
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Definition
First Mover Advantages (technology, strategic resources, customer switching costs)
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Term
| What are some opportunities in a mature industry? |
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Definition
| Refine current products, Emphasize service, Process Innovation. |
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Term
| What are some opportunities in a declining industry? |
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Definition
| Market Leadership, Market Niche, Harvest, Divestment |
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Term
| What is the difference between harvest and divestment? |
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Definition
Divestment occurs quickly, soon after a pattern of decline has been established.
Harvest is a long, systematic, phased, withdrawal. |
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Term
| What signs indicate a declining industry? |
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Definition
| A absolute decline in unit sales over a sustained period of time. |
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Term
| What signs indicate a mature industry? |
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Definition
| Slowing growth in total industry demand, development of experienced repeat customers, a slowdown in increases in production capacity, slowdown in the introduction of new products or services, increase in international competition, overall reduction in the profitability of firms in the industry. |
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Term
| What signs indicate a emerging industry? |
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Definition
| Technological innovations, changes in demand, emergence of new needs, AND MORE! |
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Term
| What signs indicate a fragmented industry? |
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Definition
| A large number of small or medium sized firms operate and no small set of firms has dominant market share or creates dominant strategies. |
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Term
| What are some examples of barriers to entry independent of scale? |
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Definition
| Proprietary Technology, Managerial Know-How, Favorable Access to Raw Materials, Learning the Curve, and Government Policy. |
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Term
| Explain the basics of the RBV model. |
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Definition
| Resource Based View - The assets a firm has determines their capabilities. The capabilities enable a firm to take full advantage of its resources which determines competitive advantage. |
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Term
| What are 4 types of resources? |
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Definition
Financial - what is used to conceive and implement strategies.
Physical Resources - materialism.
Individual Resources - The dimensions of individuals that brings value.
Organizational Resources - The bureacracy of the organization. |
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Term
| What is the VRIO framework? |
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Definition
| Value, Rarity, Imitation, Organization. How does a resource or capability fall on each of these dimensions? What does that say about long term competitive advantage derived from the resource or capability? |
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