Strategic Management Chapter 4

Front 1

Indicators of how well a company's strategy is working

Back 1

1) achievement of financial and Strategic objectives

2) if financial performance is above industry standards

3) gaining customers and market share

Front 2

specific signs of how well a company's strategy is working

Back 2

1) whether sales are growing faster, slower or the same as the market as a whole

2) whether the company is acquiring customers at an attractive rate

3) whether the films image and reputation is growing stronger or weaker

4) whether the firms profit margins are increasing or decreasing and compare to competitors
5) trends in the firms net profits and return on on investment relative to competitors

6) whether the company's financial strength and credit rating are improving or declining

7) how well the company stacks up to rivals price, quality, features, customer service, ect.

8) whether key measures of operating performance are improving, remaining steady, or deteriorating

Front 3

signs of weak strategy or execution

Back 3

sluggish financial performance and second-rate market accomplishments

Front 4

competitive assets

Back 4

a company's resources and capabilities

Front 5

resource and capability analysis

Back 5

Step 1. identify the company's competitive resources and capabilities

Step 2. examine them more closely to ascertain which are the most competitively important and whether they can support a sustainable competitive advantage.

Hint 5

a tool used to size up a company's competitive assets and determine if they can support a sustainable competitive advantage.

step 2 involves applying the four tests of a resource's competitive power

Front 6

resource

Back 6

a productive input or competitive asset that is owned or controlled by the firm

Front 7

capability

Back 7

the capacity of a firm to perform some internal activity competently

Hint 7

capabilities are developed through deployment of resources

Front 8

types of resources

Back 8

tangible - physical, financial, technological, and organizational resources

intangible - human and intellectual assets, brands, image, reputation, relationship with suppliers, company culture,

Front 9

Two approaches to finding out a company's capabilities

Back 9

1) looking at a company's list of resources and considering whether the company has built up any capabilities from them

2) survey the functions the firm performs to find capabilities associated with each function

Front 10

Resource bundle

Back 10

A closely integrated set of competitive assets centered around one or more cross functional capability

Front 11

VRIN tests for sustainable competitive advantage

Back 11

Asks if resources are

Valuable - makes company more effective competitor
Rare
Inimitable
Non-substitutable

Front 12

Social complexity & causal ambiguity

Back 12

Factors that inhibit rival's ability to imitate a firm's resources and capabilities.

Social complexity - company culture, trust based relationships with buyers and suppliers

Casual ambiguity - makes it hard for other firms to figure out how complex resources contribute to competitive advantage

Front 13

Dynamic capability

Back 13

The ongoing capacity of a company to modify its existing resources and capabilities and create new ones

Front 14

SWOT analysis

Back 14

Strengths

Weaknesses

market Opportunities

external Threats

Front 15

Competence

Back 15

An activity that a firm had learned to perform with proficiency

Hint 15

I.e. A capability

Front 16

Core competence

Back 16

An activity that a company performs proficiently that is also central to its strategy and competitive success

Front 17

Distinctive competence

Back 17

A competitively important activity that a firm performs better than its rivals.

Hint 17

A competitively superior internal strength

Front 18

Strength vs weakness

Back 18

Strength - represents a competitive asset

Weakness - shortcomings that make a competitive liability

Front 19

types of weaknesses

Back 19

1) inferior or unproven skills, expertise, or intellectual capital in important areas

2) deficiencies in competitively important physical , organizational, or intangible assets

3) missing of inferior capabilities in key areas

Front 20

most profitable market opportunities

Back 20

match up well with the firm's competitive assets

offer the best prospect for growth and profitability

present the most potential for competitive advantage

Front 21

the 2 most important parts of SWOT analysis

Back 21

1) drawing conclusions from SWOT listings

2) translating these conclusions into strategic actions

Front 22

questions that SWOT analysis answers

Back 22

1) what are the attractive aspects of the company's situation?

2) What aspects are of most concern?

3) are the internal strengths and competitive assets strong enough to allow the company to compete successfully?

4) are the weaknesses and competitive deficiencies small enough to be easily correctable, or are they fatal?

5) do strengths outweigh weaknesses enough?

6) are there attractive market opportunities suited to the company's strengths?

7) does the company have the resources to pursue said opportunities

8) on a scale of 1 - 10, what are the company's future prospects?

Front 23

the basis of good strategy

Back 23

a company's strengths should always be the basis of its strategy. Emphasising on the best competitive assets is the safest route to attracting customers and competing successfully.

Front 24

steps in SWOT analysis

Back 24

Front 25

increases vulnerability

Back 25

the higher a company's prices are above its competitors, the more vulnerable it becomes

Front 26

decreases vulnerability

Back 26

the greater the amount of customer value a company can offer relative to its rivals, the less vulnerable it becomes.

Front 27

value chain

Back 27

identifies the primary activities and related supporting activities that create customer value

Front 28

types of activities in a value chain

Back 28

primary activities - foremost in creating value for customers

support activities - facilitate and enhance the performance of the primary activities

Front 29

the primary purpose of value chain analysis

Back 29

to compare, activity by activity, how effectively and efficiently a company delivers value to is customers relative to rivals.

Front 30

Benchmarking

Back 30

Comparing how different companies perform various value chain activities, and then making cross company comparisons on how cost effective each company is

Front 31

Objective of benchmarking

Back 31

Identify the best practices and emulate them

Front 32

Improving internal value chain activities

Back 32

Improve cost effectiveness

Improve delivery of value to customers

Improve supplier related activities

Improve forward channel activities

Front 33

Competitive strength assessment

Back 33

Step 1) make list of industry key success factors

Step 2) assign weight to each measure of competitive strength

Step 3) calculate weighted strength of each competitor on each strength measure

Step 4) sum each companies' weighted strength

Step 5) use step 4 to draw conclusions

Hint 33