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Mgmt of Int Business > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

industry

A

A group of firms producing products (goods and/or services) that are similar to each other

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2
Q

perfect competition

A

A competitive situation in which
- price is set by the “market”
- all firms are price takers
- entries and exits are relatively easy

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3
Q

industrial organization (IO) economics (industrial economics)

A

A branch of economics that seeks to better understand how firms in an industry compete and then how to regulate them

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4
Q

structure-conduct-performance (SCP) model

A

An industrial organization economics model suggests that industry structure determines firm conduct (strategy), which in turn determines firm performance

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5
Q

structure

A

Structural attributes of an industry such as the cost of entry

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6
Q

conduct

A

Firm actions such as product differentiation

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7
Q

performance

A

The result of firm conduct

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8
Q

monopoly

A

A situation whereby only one firm provides the goods and/ or services for an industry

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9
Q

oligopoly

A

A situation whereby a few firms control an industry

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9
Q

duopoly

A

A special case of oligopoly that has only two players

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9
Q

five forces framework

A

A framework governing the competitiveness of an industry was proposed by Michael Porter
(1) the intensity of rivalry among competitors
(2) the threat of entrants
(3) the bargaining power of suppliers
(4) the bargaining power of buyers
(5) the threat of substitutes

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10
Q

dominance

A

A situation whereby the market leader has a very large market share

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11
Q

incumbent

A

A current member of an industry that competes against other members

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12
Q

scale-based advantage

A

Advantage derived from economies of scale (the more a firm produces some products, the lower the unit costs become)

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13
Q

economies of scale

A

Reduction in per unit costs by increasing the scale of production

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14
Q

non-scale-based advantage

A

Low-cost advantage that is not derived from the economies of scale

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15
Q

product proliferation

A

Efforts to fill product space in a manner that leaves little “unmet demand” for potential entrants

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16
Q

product differentiation

A

The uniqueness of products that customers value

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17
Q

network externality

A

The value a user derives from a product increases with the number (or the network) of other users of the same product

18
Q

platform

A

An intermediary that connects two or more distinct groups of users and enables their direct interaction

19
Q

excess capacity

A

Additional production capacity currently underutilized or not utilized

20
Q

bargaining power of the supplier

A

The ability of suppliers to raise prices or reduce the quality of goods and services

21
Q

forward integration

A

Acquiring and owning downstream assets

22
Q

bargaining power of the buyer

A

The ability of buyers to reduce prices or demand quality improvement of goods and services

23
Q

backward integration

A

Acquiring and owning upstream assets

24
Q

substitute

A

Product and service of a different industry that satisfies customer needs currently met by the focal industry

25
Q

industry positioning

A

Ways to position a firm within an industry in order to minimize the threats presented by the five forces

26
Q

artificial intelligence (AI)

A

Simulation of human intelligence processes by machines, especially computer systems

27
Q

Big Data (data analytics)

A

Analyzing extremely large data sets that may reveal previously unknown patterns, trends, and associations

28
Q

Internet of Things (IoT)

A

A system of interconnected devices and machines linked by the Internet

29
Q

digital strategy

A

An application of digital technologies to existing business activities and/or to develop new ways of competition

Also known as: the digital business model

30
Q

generic strategy

A

A strategy intended to strengthen the focal firm’s position relative to the five competitive forces, which can be
(1) cost leadership
(2) differentiation
(3) focus

31
Q

cost leadership

A

A competitive strategy that centers on competing on low costs and prices

32
Q

differentiation strategy

A

A competitive strategy that focuses on how to deliver products that customers perceive as valuable and different

33
Q

focus strategy

A

A competitive strategy that serves the needs of a particular segment or niche of an industry

34
Q

ecosystem

A

A community of organizations interacting as a system

35
Q

complementor

A

A firm that sells products that add value to the products of a focal industry

36
Q

industry life cycle

A

The evolution of an industry that typically goes through
- introduction phase
- growth phase
- maturity phase
- decline phase

37
Q

strategic group

A

A group of firms within a broad industry

38
Q

mobility barrier

A

Within industry differences that inhibit the movement between strategic groups

39
Q

flexible manufacturing technology

A

Modern manufacturing technology enables firms to produce differentiated products at low costs (usually on a smaller batch basis than the large batch typically produced by cost leaders)

40
Q

additive manufacturing (3D printing)

A

Manufacturing three-dimensional products from a digital model by using additive processes, where products are created by adding successive layers of material

41
Q

additive manufacturing v. traditional manufacturing

A

Additive manufacturing contrasts traditional manufacturing, which can be labeled “sub-tractive” processes centered on removing material by methods such as cutting and drilling.

42
Q

mass customization

A

Mass-produced but customized products

43
Q

servitization

A

A smart combination of manufacturing and services

44
Q

The title of Chapter 2

A

Managing Industry Competition

Mgmt of Int Business (14 decks)

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