Mqm 385 Chapter 1

Front 1

Setof related actions that managers take to increase their company’s performance.

Back 1

Strategy

Front 2

Creatingcompetitive advantage through effective management of the strategy-makingprocess.

Back 2

Strategic leadership

Front 3

Selectingstrategies based on analysis of an organization’s external and internalenvironment.

Back 3

Strategy formulation

Front 4

Putting strategies into action.

Back 4

Strategy implementatio

Front 5

Equitycapital for which there is no guarantee that stockholders will:

-recouptheir investment

-earna decent return.

Back 5

Risk capital

Front 6

Thereturns that shareholders earn from purchasing shares in a company.

Back 6

Shareholder value

Front 7

Sources of shareholder value:

Back 7

-Capitalappreciation in the value of a company’s shares

-Dividendpayments

Front 8

Thereturn a company makes on the capital invested in the enterprise.

Back 8

Profitability

Front 9

Netprofit over the capital invested in a firm.

Back 9

Return on invested capital (ROIC)

Front 10

Profit growth -Theincrease in net profit over time, achieved by:

Back 10

1. sellingproducts in rapidly growing markets.

2. gainingmarket share from rivals.

3. sellingmore to existing customers.

4.expandingoverseas or diversifying into new businesses.

Front 11

Toboost profitability and profit growth, managers must:

Back 11

1. usestrategies to give their company a competitive advantage over rivals.

2.deliverhigh profitability and sustainable profit growth.

Front 12

Occurswhen a company’s profitability is greater than the average profitability offirms in its industry.

Back 12

Competitive advantage

Front 13

A company’s strategies that enableit to maintain above-average profitability for a number of years.

Back 13

Sustained competitive advantage

Front 14

Conceptionof how strategies should work together as a whole to enable the company toachieve competitive advantage.

Back 14

BUSINESS MODEL

Front 15

Bear responsibilityfor a company’s overall performance or for one of its major self-containedsubunits or divisions.

Back 15

General managers

Front 16

Responsible forsupervising a particular function, task, activity, or operation.

Back 16

Functional managers

Front 17

Competes in severaldifferent businesses and has a separate self-contained division to manage each.

Back 17

Multidivisional company

Front 18

Corporate-level managers:

Back 18

1. Oversee the development of strategies for the entire organization.

2. Provide a link between people concerned with the firm’s strategicdevelopment and the shareholders.

3. Ensure that business strategies pursued by the company are consistentwith maximizing profitability and profit growth.

Front 19

Purpose of thecompany, or a statement of what the company strives to do.

Back 19

Mission

Front 20

Articulation of a company's desired achievements or future state.

Back 20

Vision

Front 21

Statement of how employees should conduct themselves and their business to help achieve the company mission.

Back 21

Values

Front 22

Precise and measurable desired state that a company attempts to realize.

Back 22

Goals

Front 23

____________ identifies strategic opportunities and threats that will affect how anorganization pursues its mission.

Back 23

Externalanalysis

Front 24

Externalanalysis involves analysis of:

Back 24

1. industryenvironment in which the company operates.

2. countryor national environment.

3. macroenvironment.

Front 25

_________ focuses on reviewing the resources, capabilities, and competencies ofa company.

Back 25

Internalanalysis

Front 26

_______identify the company’s strengths and weaknesses.

Back 26

Goals

Front 27

If a companies strategies result in superior performance, it is said to have _________

Back 27

a competitive advantage.

Front 28

To increase shareholders value, managers must pursue strategies that increase the ________ and _________.

Back 28

1. profitability of the company

2. ensure the profits grow

Front 29

Maximizing _________ is the ultimate goal of profit making companies

Back 29

shareholder value

Front 30

The higher a companies profitability and profit growth relative to its competitors, the _________.

Back 30

greater their competitive advantage will be.

Front 31

The profitability and growth of a company are determined by two main factors:

Back 31

1. its relative success in its industry

2. the overall performance of its industry relative to other industries.

Front 32

General managers have _____ responsibility

Back 32

profit and loss responsibility for a product, a business, or the whole company.