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MGMT 3000 > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

resources

A

assets, capabilities, processes, employee time, information, and knowledge that an organization controls

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2
Q

competitive advantage

A

providing greater value for the customer than a competitor can

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3
Q

sustainable competitive advantage

A

a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate

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4
Q

4 requirements for sustainable competitive advantage

A
  1. Valuable resources
  2. Rare Resources
  3. imperfectly imitable resources
  4. non-substitutable resources
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5
Q

valuable resources

A

allow companies to improve their efficiency and effectiveness

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6
Q

rare resources

A

resource that is not possessed or controlled by many competing firms

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7
Q

imperfectly imitable resources

A

resources that are impossible or extremely costly or difficult to duplicate

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8
Q

non-substitutable resource

A

no other resources can replace them and produce similar value or competitive advantage

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9
Q

3 steps of strategy-making process

A
  1. Assess need for strategic change
  2. Conduct Situational Analysis
  3. Choose Strategic Alternatives
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10
Q

competitive inertia

A

reluctance to change strategies or competitive practices that have been successful in the past

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11
Q

strategic dissonance

A

discrepancy between a company’s intended strategy and the strategic actions mangers take when implementing that strategy

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12
Q

SWOT/situational analysis

A

strengths, weaknesses, opportunities, and threats is an assessment of the strengths and weaknesses in an organization’s internal environment and the opportunities and threats in its external environment.

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13
Q

distinctive competence

A

something that a company can make, do, or perform better than its competitors.

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14
Q

core capabilities

A

the internal decision making routines, problem solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs

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15
Q

strategic group

A

a group of companies within an industry against which top managers compare, evaluate, and benchmark strategic threats and opportunities

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16
Q

core firms

A

central companies in a strategic group

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17
Q

secondary firms

A

firms that use strategies related to but somewhat different from those of core firms

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18
Q

risk avoiding strategy

A

aims to protect an existing competitive advantage

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19
Q

risk seeking strategy

A

aims to extend or create a sustainable competitive advantage

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20
Q

strategic reference points

A

targets that managers use to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage

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21
Q

3 questions to formulate an effective strategy

A
  1. what business are we in or should be in
  2. how should we compete in this industry?
  3. who are our competitors, and how should we respond to them?
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22
Q

diversification

A

owning stocks in a variety of companies in different industries

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23
Q

portfolio strategy

A

corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines

24
Q

acquisitions

A

other companies to buy

25
Q

unrelated diversification

A

creating or acquiring companies in completely unrelated businesses

26
Q

Boston Consulting Group (BCG) matrix

A

portfolio strategy that managers use to categorize their corporation’s businesses by growth rate and relative market share, helping them decide how to invest corporate funds. Often yields incorrect judgements about a company’s potential b/c uses past performance

27
Q

Stars

A

companies that have a large share of a fastgrowing market

28
Q

question marks

A

companies that have a small share of a fast-growing market. relative weakness in the market makes investing more risky. fast growing

29
Q

cash cows

A

companies that have a large share of a slow growing market (very profitable)

30
Q

dogs

A

companies that have a small share of a slow-growing market. (most common mistake is categorizing highly profitable companies as dogs)

31
Q

related diversification

A

where different business units share similar products, manufacturing, marketing, technology, or cultures.

Key is to acquire new companies with core capabilities that complement the core capabilities of businesses already in the corporate portfolio.

32
Q

grand strategy

A

broad strategic plan used to help an organization achieve its strategic goals. 3 kinds: growth, stability, and retrenchment/recovery

33
Q

growth strategy

A

to increase profits, revenues, market share, or the number of places in which the company does business

34
Q

stability strategy

A

continue doing what the company has been doing, just doing it better

35
Q

retrenchment strategy

A

to turn around very poor company performance by shrinking the size or scope of the business, or if a company is in multiple businesses, by closing or shutting down different lines of the business. (ex. cost reductions, laying off employees)

36
Q

recovery

A

consists of the strategic actions that a company takes to return to a growth strategy

37
Q

industry level strategy

A

corporate strategy that addresses the question, how should be compete in this industry?

38
Q

Porter’s 5 forces

A

character of the rivalry, threat of new entrants, threat of substitute products or services, bargaining power of suppliers, bargaining power of buyers. (stronger these forces, less attractive the industry becomes to corporate investors)

39
Q

character of the rivalry

A

measure of the intensity of competitive behavior among companies in an industry

40
Q

threat of new entrants

A

measure of the degree to which barrier to entry make it easy or difficult for new companies to get started in an industry

41
Q

threat of substitute products or services

A

measure of the ease with which customers can find substitutes for an industry’s products or services

42
Q

bargaining power of suppliers

A

measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs

43
Q

bargaining power of buyers

A

measure of the influence that customers have on the firm’s prices, More buyers, more power the company has to set prices

44
Q

cost leadership

A

producing a product or service of acceptable quality at consistently lower production costs than competitors so that the firm can offer the product or service at the lowest price in the industry

45
Q

differentiation

A

making your product or service sufficiently different from competitors’ offerings so that customers are willing to pay a premium price for the extra value or performance that it provides

46
Q

focus strategy

A

company uses either cost leadership or differentiation to produce a specialized product or service for a limited, specifically target group of customers in a particular geographic region or market segment

47
Q

defenders

A

seek moderate, steady growth by offering a limited range of products and services to a well-defined set of customers. Do their best to hold on to customers in a particular segment

48
Q

prospectors

A

seek fast growth by searching for new market opportunities, encouraging risk taking, and being the first to bring innovative new products to market

49
Q

analyzers

A

blend of the defender and prospector strategies. Seek moderate, steady growth, and limited opportunities for fast growth.

50
Q

reactors

A

do not follow consistent strategy. they react to changes, do poorer

51
Q

firm level strategy

A

how should we compete against a particular firm?

52
Q

direct competition

A

rivalry between two companies offering similar products and services that acknowledge each other as rivals and take offensive and defensive positions as they react and at to each other’s strategic decisions

53
Q

market commonality

A

degree to which two companies have overlapping products, services, or customers in multiple markets

54
Q

resource similarity

A

extent to which a competitor has similar amounts and kinds of resources, that is, similar assets, capabilities, processes, information, and knowledge used to create and sustain an advantage over competitors

55
Q

attack

A

competitive move designed to reduce a rival’s market share or profits

56
Q

response

A

countermove, prompted by a rival’s attack designed to defend or improve a company’s market share or profit

MGMT 3000 (3 decks)

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