Chapter 5 Flashcards
Competitive advantage
Providing greater value for customers than competitors can
Valuable resources
Resources that allow companies to improve efficiency and effectiveness
Rare resources
Resources that are not controlled or possessed by many competing firms
Imperfectly imitable resources
Resources that are extremely difficult or costly for others to duplicate
Strategic dissonance
Discrepancy between a company’s intended strategy and the strategic actions managers take when implementing that strategy
Situational analysis (SWOT)
An assessment of the strengths and weaknesses in an organizations environment and the opportunities and threats in the environment
Distinctive competence
What a company can make, do, or perform better than its competitors
Core capabilities
The internal decision making routines, problem solving processes and organizational cultures that determine how efficiently inputs can be turned into outputs
PESTEEL analysis
Analysis of the political, economic, social/demographic, technological, environmental, external-employee, and legal factors that affect a company and shape the strategy
Diversification
A strategy for reducing risk by owning a variety of items so that the failure of one stock does not doom the entire portfolio
Acquisitation
The purchase of a company by another company
Unrelated diversification
Creating or acquiring companies in completely unrelated businesses
BCG Matrix
Portfolio strategy developed by Boston Consulting Group that categorizes a corporation’s businesses by growth rate and relative market share and helps managers decide how to invest funds
Related diversification
Creating companies that share similar products, manufacturing, marketing, technology or culture
Grand strategy
A broad corporate level strategic plan used to achieve
Growth strategy
A strategy that concentrates on increasing profits, revenues, market share or the number of places in which the company does business
Stability strategy
Strategy that concentrates on improving the way in which the company sells the same products or services to the same customers
Retrenchment strategy
A strategy that focuses on turning around very poor company performance by shrinking the size or scope of the business
Industry level strategy
A corporate strategy that addresses the question “How should we compete in this industry”
Competitive rivalry
A measure of the intensity of competitive behavior between companies in an industry
Threat of new entrants
A measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry
Threat of substitute products or services
A measure of the ease with which customers can find substitutes for an industry;s products or services
Bargaining power of supplies
A measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs
Bargaining power of buyers
A measure of the influence that customers have on a firm
