Strategy Terms 1

Front 1

Absorptive capacity

Back 1

a firm's ability to assimilate new knowledge based on the firm's prior related knowledge

Front 2

acquisition

Back 2

An arrangement in which the assets and liabilities of the seller are absorbed into those of the buyer

Front 3

agency problem

Back 3

the potential for opportunism by an agent when a principal who wants the agent to engage in some behavior has difficulty observing the agent’s behavior

Front 4

appropriability

Back 4

The degree to which a firm can extract value from an innovation

Front 5

backward integration

Back 5

A firm’s acquisition of input supplier

Front 6

Barriers to entry

Back 6

Industry characteristics that increase the difficulty of entry

Front 7

Barriers to imitation

Back 7

characteristics of firm resources and capabilities that make them difficult to imitate

Front 8

boundaries of the firm

Back 8

the scope of operations conducted within a given firm (as opposed to operations conducted by other firms from which the focal firm buys or to which it sells)

Front 9

capabilities

Back 9

the combination and use of firm resources to produce action

Front 10

cartel

Back 10

a group of firms that explicitly agree to set prices and/or limit output

Front 11

collusion

Back 11

when firms coordinate their actions to gain market power over consumers

Front 12

competitive advantage

Back 12

characteristics of a firm that allow it to outperform rivals in the same industry

Front 13

competitive positioning

Back 13

a firm’s choice of strategies and product segments within an industry

Front 14

competitive scope

Back 14

the extent to which a firm targets broad product market segments within an industry

Front 15

complementarities

Back 15

a group of assets that work together to mutually support a particular strategy

Front 16

complementary asset

Back 16

those assets necessary to translate an innovation into commercial returns

Front 17

conglomerate

Back 17

firms that are in multiple, unrelated lines of business

Front 18

core competencies

Back 18

the subset of a firm's resources and capabilities that provide competitive advantage across several businesses

Front 19

corporate strategy

Back 19

strategies by which firms can leverage their position across markets to garner economic rents

Front 20

cost leadership

Back 20

the ability to produce products at the lowest cost, relative to competitors, with features that are acceptable to customers

Front 21

cross elasticity of demand

Back 21

percentage change in the demand for one good in response to a one percent change in the price of a second good

Front 22

differentiation

Back 22

The ability to provide value to customers through unique characteristics and attributes of a firm's products

Front 23

diversification

Back 23

the process by which a firm moves into new lines of business

Front 24

divestiture

Back 24

Selling off assets of the firm