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86 Cards in this Set

  • Front
  • Back
Three Basic Questions
Where are we competitively, where do we want to be in 3-5 years, and how do we get there
Business Strategy
View of just the business and not the entire operation
Corporate Strategy
Arching over everything and all divisions
Business entity that competes against another
Competitive Advantage
The purpose of strategic planning. Build, Structure, and Expand. Anything that will cause something to buy your product over another
Distinctive Competence
Similar to competitive advantage but applied to manufacturing firms
Strategic Management Process
Mission, Vision, Goals, Strategies, Structure, People
Operational Planning (1 year or less)
focus on current performance
Strategic Planning (3-5-10 years)
Focus on long term and competitive positioning.
Four Stages of Strategy Development
Analysis (where do we want/need to be), Formulation (Develop strategies, form the plan), Implementation (Start the plan, announce to shareholders/employees), Evaluate and Adjustment
Analytical Tools
Methods used in analyzing the competitive position of the firm
Strategy Diamond
Arenas (Where?), Vehicles (how?), Differentiators (Why?), Staging (sequence or speed), Economic Logic (How are profits achieved)
SWOT Analysis
Strengths (internal), Weaknesses (internal), Opportunities (external), Threats (external)
Strategic Imperatives
Goals which must be achieved in the company is to survive. Typical in every organizations strategic plan, which is critical for the organizations future existence
Internal Growth "Build It"
Focuses on growing through penetration, new products, new markets, etc.
Acquisition/Merger "Buy It"
Focuses on growing through buying or merging with other companies
Effectiveness (goal achievement)
A firm that accomplishes their goals
Efficiency (cost, productivity, overhead)
how well resources are utilized
The inputs that a firm uses to create goods and services
perceptible by touch.
unable to be touched or grasped; not having physical presence.
Capabilities (transformation)
Skill in using resources to create goods and services. The combination of procedures and expertise that a firm relies on to engage in distinct activities in the process of producing goods and services.
Distinctive Competencies
A competency unique to a business organization. The basis for the development of an unassailable competitive advantage.
Value Chain
The totality of a firms activities from the securing of raw materials through the transformation process (core competencies) to the delivery of finished goods through distribution channels
Value Added Concept
Value can be added in each step of the value chain.
Core Competencies
Activities a firm must do, which provide the fundamental basis for the provision of added value
Inbound Logistics (upstream functions)
Involves all aspects of securing raw materials and working with suppliers to secure inputs
Outbound Logistics (downstream functions)
Involves distribution channels and all actives post transformation for ultimately getting products/services to customers.
Primary Activities
Line Functions
Support Activities
Staff Functions
Distribution Channels
The chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer.
Vertical Integration
Opposite of outsourcing. When a company buys out a supplier and naturally, enlarges the company and expands core competencies.


The process of a firm to assume activities previously performed by suppliers or distributors
Process of moving an activity previously performed as a core competency to another firm which can perform the activity more effectively and/or efficiently
Process of moving an activity outside the US while retaining the activity as a core competency of the firm.
Economies of Scale
Concept that unit price declines with increased volume
Economies of Experience
Concept that the more an activity is performed, the more efficiently it is achieved. The inverse of "learning curve"
Process of comparing activities to competitors to determine the "best practices"
Financial Analysis
Most valuable type of analysis
Value, Rarity, Inimitability, Non-substitutability, Exploitability
Three Environmental Levels
Tool for external assessment that has 3 layers of analysis: Macro (external environment), industry or Competitive Environment, Strategic Group Environment
Strategic Groupings
Subset of firms which, because of similar strategies, resources, and capabilities, compete against each other more intensely than with other firms in an industry.
PESTEL Analysis
Tool of assessing the political, economic, sociocultural, technological, environmental, and legal contents in which a firm operates
Competitive Intelligence
Method whereby firms are able to gather information about their competitors
Industry Concentration Vs. Fragmentation
Fragmented markets are believed to be more competitive than concentrated markets, whereas concentrated markets are more difficult to enter.
Porters 5 Forces
“Attractiveness” suggests the industry’s potential for profitability. Originally intended to evaluate entry into “new” industry; now used to evaluate whether to remain in an “existing” industry based on projected attractiveness in 3-5 years.
5 Forces
Threat of New Entrants, Power of Buyers, Power of Suppliers, Intensity of Industry Rivalry, Threat of Substitutes
Complementor Firm
Any firm of industry, which through its success and growth, benefits another firm or industry
Concept of Industry Life Cycle
Pattern of evolution followed by an industry inception to current and future states
Commoditization (Undifferentiated price competition)
Competitive market environment in which, products/services are "undifferentiated" and competition is based solely on price
Market/Industry Consolidation
Reduction in the number of competitors in a market. Result of a market becoming "concentrated"
Product Life Cycle
Introduction, Growth, Mature, Decline
Re-invigoration, Reinvention, Restarting
As industries mature, certain segments may emerge to reinvigorate them, sometimes even resorting their growth industries.
Strategic Positioning
Means by which managers situate a firm relative to its rivals
Low Cost Leadership
Based on producing a good or offering a service while maintaining total costs that are lower than what it takes competitors
Based on products or offering services with quality, reliability, or prestige that is discernibly higher than that of competitors and for which customers are willing to pay
Focus Low Cost Leadership
Based on being a low-cost leader in a narrow market segment
Focus Differentiation
Based on targeting products to relatively small segments
Market Segmentation
ways that a market cant be split up and categorized
Economies of Scale
unit prices of production typically decreases with increased volume. Concept is also applied to purchasing power
Diseconomies of Scale
average total cost per unit of production increases at higher levels of output
Minimum Efficient Scale
The output level that delivers that lowest total average cost
Learning Curve (economies of experience)
With any new activity there will be a period of inefficiency until experience provides efficiency and greater proficiency at the task
One of the principal forms of differentiation of products and services.
Strategy Evaluation Criteria
Does your strategy exploit your key resources?, Does your strategy fit with current industry
conditions?, Will your differentiators be sustainable?, Are the elements of your strategy consistent and aligned with your strategic position?
Can your strategy be implemented?
Industry Evolution
Differentiated markets become undifferentiated (commoditized) as products or services are imitated/replicated by competitors thus minimizing/eliminating competitive advantage
Industries evolve over time from differentiated competition to undifferentiated competition
Technological Change/Disruption
Technological change is disruptive when change is discontinuous, so that it does not sustain existing lenders advantage.
Speed of Change
Critical factor in keeping up with the basis of competition in an industry.
High End Disruption
Creation of new markets and/or redefining bases of competition. May result in huge new markets in which, new players redefine industry rules to unseat the largest incumbents.
Low End Disruption
Targets low end of markets/ least desirable customers.
Hybrid Disruption
Most newcomers adopt some combination of new-market strategies
First Mover Advantage
The firm that is the first to offer a new product/service in a market
Second Mover Advantage (fast follower)
Second significant company to move into a market quickly following the first mover.
Limit the extent to which the new entrant's innovation impacts your business
Try to short-circuit the moves of innovations or new entrants before they make them
Shape the innovation so it becomes something the incumbent can live with or even benefit from
Minimize the risks entitled by being either a first mover or an initiator
Improve incumbent products and services to annul an innovation or new entrants offering
Portfolio Planning
practice of mapping diversified business or products based on their relative strengths and market attractiveness
Vertical Scope
(Level of Diversification along the Value Chain), The extent to which a firm is vertically integrated
Horizontal Scope
(Level of Related Diversification), Extent to which a firm participates in related market segments or industries outside its existing value-chain activities
Economy of Scope
(Lower cost as a result of sharing resources to produce more than one product), condition under which lower total average costs result from sharing resources to product more than one product or service.
Concept of diversification in which two or more interdependent businesses adapt to each other
Boston Consulting Model
Stars, Cash Cows, Problem Children, Dogs
Condition under which the combined benefits of activities in two or more areas are greater than the simple sum or those benefits.
Strategic Options
Related Diversification, Unrelated Diversification (Conglomerate Concept), Vertical Integration, Outsourcing, Off-shoring, Horizontal Integration, Strategic Alliances, Corporate Refocus/Strategic Audit