1. Strategic Management Inputs Flashcards
How is strategic competitiveness achieved?
By implementing a value creating strategy.
What is a strategy?
Integrated and coordinated actions that exploit core competences and gain competitive advantage.
What is a competitive advantage?
A strategy that competitors find costly to imitate or are unable to replicate.
What are above-average returns?
More profit than investors expected.
What is a risk?
Uncertainty about economic gains and losses.
What is a strategic management process? (SMP)
Decisions and actions a firm implements to achieve strategic competitiveness and gaining above-average returns.
True or false: The strategic management process is dynamic.
True
What is a factor that changes markets?
Governments when they fear a market will fail.
Negotiating with politicians complicates building competitive advantages.
Where does hyper competition happen?
Unstable markets.
What does hyper competition entail? Give two points.
1) Rapidly escalating price quality competition. First-movers have an advantage.
2) High aggression between firms.
What is a global economy?
An economy in which goods, services, people and skills freely move geographically.
Define globalisation.
Increasing economic interdependence between countries.
List two benefits of globalisation.
1) Increased opportunities for firms.
2) Increased performance standards (quality, cost, productivity and operational efficiency)
Give two risks of globalisation.
1) It takes time to adapt to foreign markets.
2) Over-diversification: becoming so international that extended operations are hard to manage.
Define technology diffusion.
The rate at which new technology becomes available and is used.
Increased substantially the last 15-20 years.
Define perpetual diffusion.
Describes how rapidly/consistently new information and technology replaces old ones..
What benefit does perpetual diffusion reduce?
Patents because competitors will find out about the new technology.
What do disruptive technologies do?
Destroy the value of existing technology and creates new markets.