Strategic Mgmt Test 1

Front 1

Strategic Management

Back 1

An integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage

Front 2

Competitive Advantage

Back 2

Superior performance relative to other competitors in the same industry or the industry average

Front 3

Sustainable Competitive Advantage

Back 3

Outperforming competitors or the industry average over a prolonged period of time

Front 4

Competitive Disadvantage

Back 4

Underperformance relative to other competitors in the same industry or the industry average

Front 5

Competitive Parity

Back 5

Performance of two or more firms at the same level

Front 6

Strategy

Back 6

The goal-directed actions a firm intends to take in its quest to gain and sustain competitive advantage

Front 7

Industry Effects

Back 7

The results attributed to the choice of industry in which to compete

Front 8

Firm effects

Back 8

The results of managers' actions to influence firm performance

Front 9

Industry Effects %

Back 9

20%

Front 10

Firm Effects %

Back 10

30-45%

Front 11

Other Effects %

Back 11

35-50%

Front 12

What is included in "other effects" in explaining superior firm performance?

Back 12

Corporate parent, year effects, unexplained variance

Front 13

NOT strategy

Back 13

pricing, internet, alliance, operations, IT, brand, marketing, HR, etc.

Front 14

Operational strategy

Back 14

Contributes to a unique strategy position, but is not a strategy itself

Front 15

Stakeholders

Back 15

Individuals or groups who can affect or are affected by the actions of a firm

Front 16

Internal stakeholders

Back 16

stockholders, employees, and board members

Front 17

External Stakeholders

Back 17

customers, suppliers, alliance partners, creditors, unions, communities, and government at various levels

Front 18

Mission

Back 18

Description of what an organization actually does-what its business is- and why it does it; can be consumer-oriented or product-oriented

Front 19

Strategic Commitments

Back 19

Actions that are costly, long-term oriented, and difficult to reverse

Front 20

Emergent Strategy

Back 20

Any unplanned strategic initiative undertaken by mid-level employees of their own volition; bottom up strategic plan

Front 21

Intended Strategy

Back 21

The outcome of a rational and structured-down strategic plan; top-down strategic plan

Front 22

unrealized strategy

Back 22

part or all of a firm's strategic plan that falls by the wayside due to unexpected events; unpredictable events

Front 23

Realized Strategy

Back 23

combo of intended and emergent strategy

Front 24

parts of Emergent Strategy include:

Back 24

Autonomous actions, serendipity, resource allocation process, and real options

Front 25

What does PEST stand for?

Back 25

Political, Economic, Sociocultural, and Technological

Front 26

PESTEL Model

Back 26

A framework that categorizes and analyzes an important set of external forces that might impinge upon a firm. These forces are embedded in the global environment and can create both opportunities and threats for the firm

Front 27

Economic Factors

Back 27

Growth rates, interest rates, levels of employment, price stability (inflation and deflation), and currency exchange rates

Front 28

Porter's Five Forces

Back 28

1. Threat of Entry 2. Power of Suppliers 3. Power of Buyers 4. Threat of substitutes 5. Rivalry among existing competitors

Front 29

Five Forces Model Definition

Back 29

A framework that identifies forces that determine the profit potential of an industry and shape a firm's competitive strategy

Front 30

The threat of entry is high when:

Back 30

-customer switching costs are low
-capital requirements are low
-incumbents do not posses either proprietary technology or established brand equity
-new entrants expect that incumbents will not or cannot retaliate

Front 31

Power of suppliers is high when:

Back 31

-Incumbent firms face significant switching costs when changing suppliers
-suppliers offer products that are differentiated
-there are no readily available substitutes for the products or services that the suppliers offer
-Suppliers can credibly threaten to integrate into the industry

Front 32

The power of buyers is high when

Back 32

-there are a few large buyers
-each buyer purchases large quantities relative to the size of a single seller
-the industry's products are standardized or undifferentiated commodities
-buyers face little or no switching costs
-buyers can credibly threaten to backward-integrate into the industry

Front 33

The threat of substitutes is high when

Back 33

-the substitute offers an attractive price-performance trade-off
-the buyer's cost of switching to the substitute is low

Front 34

the rivalry among existing competitors is high when

Back 34

-there are many competitors in the industry
-the competitors are roughly of equal size
-industry growth is slow, zero, or even negative
-exit barriers are high
-products and services are direct substitutions

Front 35

Core competencies

Back 35

unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost

Front 36

Resource Heterogeneity

Back 36

assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms

Front 37

Resource immobility

Back 37

assumption in the resource-based view that a firm has resources that tend to be "sticky" and that do not move easily from firm to firm

Front 38

Value Chain

Back 38

The internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value.

Front 39

primary activities

Back 39

firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain

Front 40

support activities

Back 40

firm activities that add value indirectly, but are necessary to sustain primary activities

Front 41

Casual Ambiguity

Back 41

a situation in which the cause and effect of a phenomenon are not readily apparent

Front 42

Social complexity

Back 42

a situation in which different social and business systems interact with one another

Front 43

SWOT analysis

Back 43

a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths, weaknesses, opportunities and threats

Front 44

Measuring Competitive Advantage

Back 44

1. How much economic value does the firm generate
2. What is the firm's accounting profitability
3. how much shareholder value does the firm create

Front 45

Value

Back 45

the dollar amount a consumer would attach to a good or service; the maximum willingness to pay; aka reservation price

Front 46

economic value created

Back 46

Difference between value and cost; aka economic contribution

Front 47

profit (producer surplus)

Back 47

difference between price charged and the cost to produce

Front 48

Consumer surplus

Back 48

difference between the value a consumer attaches to a good or service and what he paid for it

Front 49

The balanced scorecard

Back 49

strategy implementation tool that harnesses multiple internal and external performance metrics in order to balance financial and strategic goals

Front 50

Questions the balanced scorecard asks

Back 50

1. How do customers view us?
2. How do we create value?
3. What core competencies do we need?
4. How do shareholder's view us?

Front 51

Advantages of the balanced scorecard

Back 51

-communicate and link the strategic vision to responsible parties within the organization
-translate the vision into measurable operational goals
-design and plan business processes
-implement feedback and organizational learning in order to modify and adapt strategic coals when indicated