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116 Cards in this Set
- Front
- Back
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Low-Cost Strategies
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Business strategies that seek to establish long-term competitive advantages by emphasizing and perfecting value chain activities that can be achieved at costs substantially below what competitors are able to match on a sustained basis. This allows the firm, in turn, to compete primarily by charging a price lower than competitors can match and still stay in business.
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Differentiation
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A business strategy that seeks to build competitive advantage with its product or service by having it be “different” from other available competitive products based on features, performance, or other factors not directly related to cost and price. The difference would be one that would be hard t create and/or difficult to copy or imitate.
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Speed-Based Strategies:
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Business strategies built around functional capabilities and activities that allow the company to meet customer needs directly or indirectly more rapidly than its main competitors.
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Market Focus
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This is a generic strategy that applies a differentiation strategy approach, or a low-cost strategy approach, or a combination- and does so solely in a narrow (or “focused”) market niche rather than trying to do so across the broader market. The narrow focus may be geographically defined or defined by product type features, or target customer type, or some combination of these.
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Emerging Industry
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An industry that has growing sales across all the companies in the industry based on growing demand for the relatively new products, technologies, and/or services made available by the firms participating in this industry
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Growth Industry Strategies
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Business strategies that may be more advantageous for firms participating in rapidly growing industries and markets
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Mature Industry Strategies
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Strategies used by firms competing in markets where the growth rate of that market from year to year has reached or is close to zero.
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Declining Industry
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An industry in which the trend of total sales as an indicator of total demand for an industry’s products or services among all the participants in the industry have started to drop from the last several years with the likelihood being that such a trend will continue indefinitely
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Fragmented Industry
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An industry in which there are numerous competitors (providers of the same or similar products or services the industry involves) such that no single firm or small group of firms controls any significant share of the overall industry sales.
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Global Industry
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Industry in which competition crosses national borders
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Grand Strategy Selection Matrix
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a four-cell guide to strategies based upon whether the business is (1) operating from a position of strength or weakness and (2) rely on its own resources versus having to acquire resources via merger or acquisition
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Vertical acquisition
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Acquisition of firms that supply inputs such as raw materials, or customers for its outputs, such as warehouses for finished products
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Conglomerate Diversification
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Acquiring or entering business unrelated to a firm’s current technologies, markets, or products
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Retrenchment
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Cutting back on products, markets, operations because the firm’s overall competitive and financial situation cannot support commitments needed to sustain or build its operations
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Divestiture
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The sale of a firm or a major component
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Liquidation
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Closing down the operations of a business and selling its assets and operations to pay its debts and distribute any gains to stockholders
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Concentrated Growth
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Aggressive market penetration where a firm’s strong position and favorable market growth allow it to “control” resources and effort for focused growth
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Market Development
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Selling present products, often with only cosmetic modification to customers in related marketing areas by adding channels of distribution or by changing the content of advertising or promotion
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Product Development
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The substantial modification of existing products or the creation of new but related products that can be marketed to current customers through established channels
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Innovation
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A strategy that seeks to reap the initially high profits associated with customer acceptance of a new or greatly improved product
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Horizontal acquisition
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Growth through the acquisition of one or more similar firms operating at the same state of the production0marketing chain
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Concentric diversification
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Acquisition of business that are related to the acquiring firm in terms of technology, markets, or products
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Joint Ventures
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Commercial companies created and operated for the benefit of the co-owners; usually two or more separate companies that form the venture
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Strategic Alliances
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Partnerships that are distinguished from joint ventures because the companies involved do not take an equity position in one another
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Grand Strategy Clusters
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Strategies that may be more advantageous for firms to choose under one of four sets of conditions defined by market growth rate and the strength of the firm’s competitive position
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Portfolio Techniques
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An approach pioneered by the Boston Consulting Group that attempted to help managers “balance” the flow of cash resources among their various businesses while also identifying their basic strategic purpose within the overall portfolio
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Market Growth Rate
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The projected rate of sales growth for the market being served by a particular business
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Relative Competitive Position:
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The market share of a business divided by the market share of its largest competitor
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Stars:
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Businesses in rapidly growing markets with large market shares
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Cash-Cow:
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Businesses with a high market share in low-growth markets or industries
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Dogs:
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Low market share and low market growth businesses
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Question Marks:
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Businesses whose high growth rate gives them considerable appeal but whose low market share makes their profit potential uncertain
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Volume Businesses:
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Businesses that have few sources of advantage, but the size is large- typically the result of scale economies
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Stalemate Businesses:
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Businesses with few sources of advantage, most of them small. Skills in operational efficiency, low overhead, and cost management are critical to profitability
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Fragmented Businesses:
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Businesses with many sources of advantage, but they are all small. They typically involve differentiated products with low brand loyalty, easily replicated technology and minimal scale economies
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Specialization Businesses:
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Businesses with many sources of advantage. Skills in achieving differentiation (product design, branding expertise, innovation, and perhaps scale) characterize winning specialization businesses.
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Parenting Framework:
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the perspective that the role of corporate headquarters (the “parent”) in multi-businesses (the “children”) companies is that of a parent sharing wisdom, insight, and guidance to help develop its various businesses to excel.
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Patching:
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The process by which corporate executives routinely “remap” their businesses to match rapidly changing market opportunities- adding, splitting, transferring, exiting, or combining chunks of business
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Strategic Processes:
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Decision making, operational activities, and sales activities that are critical business processes
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Strategic Positioning:
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The way a business is designed and positioned to serve target markets
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Short-Term Objectives:
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Measurable outcomes achievable or intended to be achieved in one year or less
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Functional Tactics:
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Detailed statements of the “means” or activities that will be used by a company to achieve short-term objectives and establish competitive advantage
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Outsourcing:
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Obtaining work previously done by employees inside the companies from sources outside the company
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Empowerment:
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The act of allowing an individual or team the right and flexibility to make decisions and initiate action
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Policies:
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Broad, precedent-setting decisions that guide or substitute for repetitive or time-sensitive managerial decision making
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Innovation Timeout Policy:
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Innovation Time Out Policy refers to what is usually an official company guideline, or policy, establishing an amount of time during each work week an employee, or specific types of employees (I.e. Engineers) can at their choice set aside from their regular assignment to work or innovate new ideas they are thinking about
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Stock Options:
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The right or option to purchase company stock at a fixed price at some future date
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Restricted Stock:
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Stock given to an employee who is prohibited or “restricted” from selling the stock for a certain time period and not at all if they leave the company before that time period
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Golden Handcuffs:
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A form of executive compensation where compensation is deferred (either restricted stock plan or bonus income deferred in a series of annual installments)
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Golden Parachute:
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A form of bonus compensation that guarantees a substantial cash payment if the executive quits, if fired, or simply retires
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Organizational Structure:
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Refers to the formalized arrangements of interaction between and responsibility for the tasks, people, and resources in an organization
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Simple Organizational Structure:
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Structure in which there is an owner and a few employees and where the arrangement of tasks, responsibilities, and communication is highly informal and accomplished through direct supervision
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Functional Organizational Structure:
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Structure in which the tasks, people, and technologies necessary to do the work of the business are divided into separate “functional” groups (i.e. marketing, operations, finance) with increasingly formal procedure for coordinating and integrating their activities to provide the business’s products and services
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Divisional Organizational Structure:
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Structure in which a set of relatively autonomous units, or divisions, are governed by a central corporate office but where each operating division has its own functional specialists who provide products or services different from those of other divisions
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Strategic Business Unit:
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An adaptation of the divisional structure in which various divisions or parts of divisions are grouped together based on some common strategic elements, usually linked to distinct product/market differences
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Holding Company Structure:
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Structure in which the corporate entity is a broad collection of often unrelated businesses and divisions such that it (the corporate entity) acts as financial overseer “holding” the ownership interest in the various parts of the company, but has little direct managerial involvement
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Matrix Organizational Structure:
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The matrix organization is a structure in which functional and staff personnel are assigned to both a basic functional area and to a product or project manager. It provides dual channels of authority, performance responsibility, evaluation, and control
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Product-Team Structure:
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Assigns functional managers and specialists to a new product, project, or process team that is empowered to make major decisions about their product. Team members are assigned permanently in most cases.
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Restructuring:
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Redesigning an organizational structure with the intent of emphasizing and enabling activities most critical to a firm’s strategy to function at maximum effectiveness
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Business Process Reengineering:
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A customer-centric restructuring approach. It involves fundamental rethinking and radical redesigning of a business process so that a company can best create value for the customer by eliminating barriers that create distance between employees and customers
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Downsizing:
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Eliminating the number of employees, particularly middle management, in a company
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Self-Management:
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Allowing work groups or work teams to supervise and administer their work as a group or team without a direct supervisor exercising the supervisory role. These teams set parameters of their work, make decisions about work-related matters, and perform most of the managerial functions previously done by their direct supervisor
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Virtual Organization:
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A temporary network of independent companies- suppliers, customers, subcontractors, and even competitors- linked primarily by information technology to share skills, access to markets, and costs
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Agile Organization:
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A firm that identifies a set of business capabilities central to high profitability operations and then builds a virtual organization around those capabilities
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Outsourcing:
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Obtaining work previously done by employees inside the companies from sources outside the company
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Modular Organization:
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An organization structured via outsourcing where the organization’s final product or service is based on the combination of several companies’ self-contained skills and business capabilities
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Business Process Outsourcing:
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Having an outside company manage numerous routine business management activities previously done by employees inside the company such as HR, supply procurement, Finance and accounting, Customer care, Supply-Chain logistics, engineering, R&D, sales and marketing, facilities management, and management or development
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Strategic Alliances:
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Alliances with suppliers, partners, contractors, and other providers that allow partners in the alliance to focus on what they do best, farm out everything else, and quickly provide value to the customer
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Boundaryless Organization:
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Organizational structure that allows people to interface with others throughout the organization without need to wait for a hierarchy to regulate that interface across functional, business, and geographic boundaries
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Horizontal boundaries:
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Rules of communication, access, and protocol for dealing with different departments or functions or processes within an organization
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Vertical boundaries:
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Limitations on interaction, contact, and access between operations and management personnel; between different levels of management; and between different organizational parts like corporate versus divisional units.
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Geographic boundaries:
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Limitations on interaction and contact between people in a company based on being at different physical locations domestically and globally
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External interface boundaries:
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Formal and informal rules, locations, and protocol that separate and/or dictate the interaction between members of an organization and those outside the organization- customers, suppliers, partners, regulators, associations, and even competitors
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Corporate Lattice:
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Corporate lattice is a model of how work, careers and communication get done in 21st century organizations up, down, and across organizational levels and positions versus a “corporate ladder” tradition that views work, careers and communication as predominately hierarchical driven
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Lattice:
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A metaphor used to describe reality of the nature and structure of work in organizations today- a 3 dimensional structure extending vertically, horizontally, and diagonally whereby people communicate and work with others anywhere, anytime, to provide answers, ideas, form teams, and solve problems
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Learning Organization:
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Organization structured around the idea that it should be set up to enable learning, to share knowledge, to seek knowledge, and to create opportunities to create new knowledge. It would more into new markets to learn about those markets rather than simply bring a brand to it, or find resources to exploit in it.
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Ambidextrous organization:
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Organization structure most notable for its lack of structure wherein knowledge and getting it to the right place quickly are the key reasons for organization. Managers become knowledge “nodes” through which intricate networks of personal relationships-inside and outside the formal organization- are constantly, and often informally, coordinated to bring together relevant know-how and successful action
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Organizational Leadership:
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The process and practice by key executives of guiding and shepherding people in an organization toward a vision over time and developing that organization’s future leadership and organizational culture
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Strategic Intent:
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Leaders’ clear sense of where they want to lead their company and what results they expect to achieve
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Leader’s Vision:
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An articulation of a simple criterion or characterization of what a leader sees the company must become in order to establish and sustain global leadership
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Leadership Development:
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The effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers employed
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Perseverance (of a leader):
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The capacity to se a commitment through to completion long after most people would have stopped trying
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Principles (of a leader):
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A leader’s fundamental personal standards that guide her sense of honesty, integrity, and ethical behavior
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Passion (of a leader):
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A highly motivated sense of commitment to what you do and want to do
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Position Power:
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The ability and right to influence and direct others based on the power associated with formal position in the organization
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Reward Power:
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The ability to influence and direct others that comes from being able to confer rewards in return for desired actions or outcomes
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Information Power:
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The ability to influence others based on your access to information and your control of dissemination of information that is important to subordinates and others yet not otherwise easily obtained
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Punitive Power:
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Ability to direct and influence others based on your ability to coerce and deliver punishment for mistakes or undesired actions by others, particularly subordinates
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Expert Influence:
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The ability to direct and influence others because they defer to you based on your expertise or specialized knowledge that is related to the task, undertaking, or assignment in which they are involved
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Referent Influence:
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The ability to influence others derived from their strong desire to be associated with you, usually because they admire you, gain prestige or a sense of purpose by that association, or believe in your motivations
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Peer Influence:
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The ability to influence individual behavior among members of a group based on group norms, a group sense of what is the right thing or right way to do things, and the need to be valued and accepted by the group
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Organizational Culture:
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The set of important assumptions and beliefs (Often unstated) that members of an organization share in common
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Ethical Standards:
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A person’s basis for differentiating right from wrong
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Strategic Control:
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Management efforts to track a strategy as it is being implemented, detect problems or changes in its underlying premises, and make necessary adjustments
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Premise Control:
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Management process of systematically and continuously checking to determine whether premises upon which the strategy is based are still valid
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Strategic Surveillance:
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Management efforts to monitor a broad range of events inside and more often outside the firm that are likely to affect the course of its strategy over time
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Special Alert Control:
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Management actions undertaken to thoroughly, and often very rapidly, reconsider a firm’s strategy because of a sudden, unexpected event
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Implementation Control:
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Management efforts designed to assess whether the overall strategy should be changed in light of results associated with the incremental actions that implement the overall strategy. These are usually associated with specific strategic thrusts or projects and with predetermined milestone reviews
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Strategic Thrusts or Projects:
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Special efforts that are early steps in executing a broader strategy, usually involving significant resources commitments yet where predetermined feedback will help management determine whether continuing to pursue the strategy is appropriate or whether it needs adjustments or major change
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Milestone reviews:
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Points in time, or at the completion of major parts of a bigger strategy, where managers have predetermined they will undertake a go or no-go type of review regarding the underlying strategy associated with the bigger strategy
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Balanced Scorecard:
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A management control system that enables companies to clarify their strategies, translate them into action, and provide quantitative feedback as to whether the strategy is creating value, leveraging core competencies, satisfying the company’s customers, and generating a financial reward to its shareholders
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Dashboard:
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A user interface that organizes and presents information from multiple digital sources simultaneously in a user-designed format on the computer screen
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Invention:
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The creation of new products or processes through the development of new knowledge or from new combinations of knowledge
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Innovation:
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The initial commercialization of invention by producing and selling a new product, service, or process
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Incremental Innovation:
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Simple changes or adjustments in existing products, services, or processes
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Continuous Improvements:
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The process of relentlessly trying to find ways to improve and enhance a company’s products and processes from design through assembly, sales, and service. It is called kaizen in Japanese. It is usually associated with incremental innovation
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CCC21:
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A world-famous, cost-oriented continuous improvement program at Toyota (Construction of Cost Competitiveness for the 21st Century)
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Six Sigma:
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A continuous improvement program adopted by many companies in the last two decades that takes a very rigorous and analytical approach to quality and continuous improvement with an objective to improve profits through defect reduction, yield improvement, improved customer satisfaction, and best-in-class performance
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Breakthrough Innovation:
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An innovation in a product, process, technology, or the cost associated with it that represents a quantum leap forward in one or more of these ways
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Disruptive Innovation:
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A term to characterize breakthrough innovation popularized by Harvard Professor Clayton Christensen; usually shakes up or revolutionizes industries with which they are associated even though they often come from totally different origins or industry settings than the industry they “disrupt”
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Ideagoras:
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Web-enabled, virtual marketplaces which connect people with unique ideas, talents, resources, or capabilities, with companies seeking to address problems or potential innovations in a quick, competent manor
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Entrepreneurship:
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The process of bringing together the creative and innovative ideas and actions with the management and organizational skills necessary to mobilize the appropriate people, money, and operating resources to meet an identifiable need and create wealth in the process
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Debt Financing:
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Money “Loaned” to an entrepreneur or business venture that must be repaid at some point in time
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Equity Financing:
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Money provided to a business venture that entitles the provider to rights or ownership in the venture and which is not expected to be repaid
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Intrapreneurship:
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A term associated with entrepreneurship in large, established companies; the process of attempting to identify, encourage, enable, and assist entrepreneurship within a large, established company so as to create new products, processes, services, or improvements that become major new revenue streams and/or sources of cost savings for the company
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Intrapreneurship Freedom Factors:
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Ten characteristics identified by Dr. Gordon Pinchot and elaborated upon by others that need to be present in large companies seeking to encourage and increase the level of intrapreneurship within their company
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