Chapter 1 Flashcards
It is achieved when a firm successfully formulates and implements a value-creating strategy
strategic competitiveness
It is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
strategy
It happens when it implements a strategy that competitors are unable to duplicate or find too costly to try to imitate
competitive advantage
True or false. An organization should not be confident that its strategy has resulted in one or more useful competitive advantages only if the competitors’ efforts to duplicate its strategy have ceased or failed.
False. An organization can be confident that its strategy has resulted in one or more useful competitive advantages only after competitors’ efforts to duplicate its strategy have ceased or failed.
It is the returns in excess of what an investor expects to earn from other investments with a similar amount of risk
above-average returns
It is an investor’s uncertainty about the economic gains or losses that will result from a particular investment
risk
True or False. Performance is sometimes measured in terms of the amount and speed of growth rather than more traditional profitability measures
True
It is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns
strategic management process
True or False. The first step in the strategic management process is analyzing the firm’s internal and external environment to determine its resources, capabilities, and core competencies which will help it to develop its vision and mission and formulate its strategy. To implement this strategy, the firm takes actions toward achieving strategic competitiveness and above-average returns.
True
It is one in which goods, services, people, skills, and ideas move freely across geographic borders
global economy
It is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders
globalization
3 categories of trends and conditions (TIIk)
- technology diffusion and disruptive technologies
- information age
- increasing knowledge intensity
It is a term used to describe how rapidly and consistently new,
information-intensive technologies replace older ones
perpetual innovation
It is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment
strategic flexibility
It is a model that assumes that each organization is a collection of unique resources and capabilities
resource-based model
It is the inputs into a firm’s production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers
resources
True or False. Individual resources alone may not yield a competitive advantage
True
True or False. Resources have a lesser likelihood of being a source of competitive advantage when they are formed into a capability
False. Resources have a greater likelihood of being a source of competitive advantage when they are formed into a capability
It is the capacity for a set of resources to perform a task or an activity in an integrative manner
capability
It is the resources and capabilities that serve as a source of competitive advantage for a firm over its rivals.
core competencies
This model also assumes that firms acquire different resources and develop unique capabilities based on how they combine and use the resources; that resources and certainly capabilities are not highly mobile across firms; and that the differences in resources and capabilities are the basis of competitive advantage
Resource-based model
4 criteria of resources and capabilities to become core competencies
Resources are:
1. Valuable
2. Rare
3. Costly to imitate
4. Nonsubstitutable
To form a vision and mission, and subsequently to select one or more strategies and to determine how to implement them, firms use both:
I/O model or industrial organization model and resource-based model
It is a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve
Vision
It is a statement that points the firm in the direction of where it would eventually like to be in the years to come
vision statement
True or False. The mission is the foundation for the firm’s vision
False. The vision is the foundation for the firm’s mission
It specifies the business in which the firm intends to compete and the customers it intends to serve
mission
They are the individuals and groups who can affect, and are affected by, the strategic outcomes achieved and who have enforceable claims on a firm’s performance
stakeholders
They are the people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission.
strategic leaders
True or False. Strategic leaders’ decisions and actions shape a firm’s culture
True
It refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influences how the firm conducts business
organizational culture
It entails the total profits earned in an industry at all points along the value chain.
profit pool
It is a rational approach firms use to achieve strategic competitiveness and earn above-average returns.
strategic management process
True or False. The fundamental nature of competition is different in the current competitive landscape
true
The core assumption of this model is that the firm’s external environment has more of an influence on the choice of strategies than do the firm’s internal resources, capabilities, and core competencies. Thus, this model is used to understand the effects of industry’s characteristics can have on a firm when deciding what strategy or strategies to use to compete against rivals.
I/O model
This model suggests that above-average returns are earned when the firm locates an attractive industry and successfully implements the strategy dictated by that industry’s characteristics
I/O model
The core assumption of this model is that the firm’s unique resources, capabilities, and core competencies have more of an influence on selecting and using strategies than does the firm’s external environment.
resource-based model
It is a model that suggests that the above-average returns are earned when the firm uses its valuable, rare, costly to imitate, and Nonsubstitutable resources and capabilities to compete against its rivals in one or more industries
resource-based model
