Chapter 1 reading Flashcards
Example: even though the company is successful it must be constantly aware of changing conditions that might impact its costs, demand, and ability to perform.
Mcdonald’s
above average-returns exceed investors’ expected levels of return…
for given risk levels
Point out that in the long run, firms must earn_______ and provide investors with ______ if they are to survive.
at least average returns, average returns
If a firm earns below-average returns and provides investors with below-average returns, investors will _____
withdraw their funds and place them in investments that earn at least average returns.
In smaller new venture firms, performance is sometimes measured in terms of the _____ and ______ rather than more traditional profitability measures
amount, speed of growth
A framework that can assist firms in their quest for strategic competitiveness is the
strategic management process
______ among the three primary elements indicate the dynamic nature of the strategic management process: strategic inputs, strategic actions, and strategic outcomes
Feedback linkages
_____ links the elements of the strategic management process together and helps firms continuously adjust or revise strategic inputs and strategic actions in order to achieve desired strategic outcomes.
Feedback
two approaches to the strategic management process
industrial organization model
resource based model
The _______ can be described as one in which the fundamental nature of competition is changing in a number of the world’s industries
competitive landscape
The contemporary competitive landscape thus implies that traditional sources of competitive advantage—______ and ________—may not be as important in the future as they were in the past
economies of scale and large advertising budgets
_______, a condition that results from the dynamics of strategic moves and countermoves among innovative, global firms
hypercompetition
____ is seen as an extremely competitive market in which local market-seeking MNCs (multinational corporations) fiercely compete against other MNCs and local low-cost producers
China
____ is now an exporter of local management talent.
example:
China, procter & gamble
_________ is illustrated by the following: Financial capital might be obtained in one national market and used to buy raw materials in another one
globalization
_________ is illustrated by the following: Manufacturing equipment bought from another market produces products sold in yet another market
globalization
Global competition has increased performance standards in many dimensions, including:
quality, cost, productivity, product intro time, operational efficiency
In the twenty-first century competitive landscape, only firms that meet, and perhaps exceed, ______ are likely to earn strategic competitiveness.
global standards
Risks of globalization
liability of foreignness
overdiversification
entry into international markets requires proper use of the _______.
strategic management process
example of shorter product life cycles resulting from rapid diffusion of innovation
computer industry: hard disk drives
The rapid diffusion of innovation may have made patents a source of competitive advantage only in the_______ and _______
pharmaceutical and chemical industries
______ can destroy the value of existing technologies by replacing them with new ones. Current examples include _________
Disruptive technologies
the success of iPods, PDAs, and WiFi.
number of PCs is expected to grow to ______ by 2015
2.3 billion
there is a strong link between ____ and _____
knowledge and innovation
• Shareholder value is increasingly influenced by the value of a firm’s _____
intangible assets
This means that to achieve competitive advantage in the information-intensive competitive landscape, firms must move beyond accessing information to exploiting information by:
- Capturing intelligence
- Transforming intelligence into usable knowledge
- Embedding it as organizational learning
- Diffusing it rapidly throughout the organization
However, those working within firms to develop strategic flexibility should understand that the task is not an easy one, largely because of _____ that can build up over time.
A firm’s focus and past core competencies may actually slow ______
inertia
change and strategic flexibility.
______, which was a dominant paradigm from the 1960s through the 1980s
I/O model
The I/O model has been supported by research indicating:
• ___% of firm profitability can be explained by industry characteristics
• ___% of firm profitability can be attributed to firm characteristics and the actions taken by the firm
• Overall, this indicates a _____ relationship—or even an _______—between industry characteristics (attractiveness) and firm strategies that result in firm performance
20
36
reciprocal
interrelationship
_____ are inputs into a firm’s production process, such as capital equipment, individual employee’s skills, patents, brand names, finance, and talented managers
Resources
_____ are the capacity for a set of resources to perform—integratively or in combination—a task or activity
Capabilities
strategies should be selected that enable the firm to best exploit its core competencies, relative to opportunities in the external environment. One example of this is the experience of _____
Amazon that used its capabilities to market and distribute books using the Internet successfully to capture a 20-month first-mover advantage in this new marketplace
Often related to functional skills (e.g., marketing at Philip Morris), ______—when developed, nurtured, and applied throughout a firm—may result in strategic competitiveness.
core competencies
_____is “big picture” thinking with passion that helps people feel what they are supposed to be doing
vision
• Rely on input from multiple key stakeholders
vision
• Our vision is to be the world’s best quick service restaurant.
mcdonald’s vision statement
• To make the automobile accessible to every American
ford’s vision
the most effective vision statement results when the CEO…
involves a host of people to develop it
A _____ should be clearly tied to the conditions in the firm’s external and internal environments and it must be achievable
vision statement
A firm’s ___ is an externally focused application of its vision that states the firm’s unique purpose and the scope of its operations in product and market terms
mission
host communities primary expectation
long term employment, tax revenues, minimum use of public support services
At the level of _____, firms must at least minimally satisfy all stakeholders.
average returns
When returns are ____, some stakeholders can be minimally satisfied, while others may be dissatisfied
below average
