Chapter 6 Flashcards
Resources
Assets, capabilities, processes, employee time, information, and knowledge that an organization controls.
Competitive advantage
Using resources to provide greater value for customers than competitors can
Sustainable competitive advantage
When other companies cannot duplicate the value a firm is providing to customers
Valuable resources
Allow companies to improve their efficiency and effectiveness
Rare resources
Resources that are not controlled or possessed by many competing firms
Imperfectly limitable resources
Resources that are impossible or extremely costly or difficult to duplicate
Nonsubstitutable resources
No other resources can replace them and produce similar value or competitive advantage
Competitive inertia
A reluctance to change strategies or competitive practices that have been successful in the past
Strategic dissonance
Discrepancy between a company’s intended strategy and the actions managers take when actually implementing that strategy
Situational analysis (SWOT)
Strengths, weaknesses,opportunities, and threats assessment in an organization internal environment and the opportunities and threats in external environment
Distinctive competence
Company that can make do or perform better than its competitors
Shadow strategy task force
Company actively seeking out its own weaknesses and then thinking like it’s competitors trying to determine how they can be exploited for competitive advantage
Core capabilities
Less visible internal decision making routine, problem solving process and organizational cultures that determine how efficiently inputs can be turned into outputs
Strategic group
Group of other companies within an industry against which top managers compare evaluate and benchmark their company’s strategic threats and opportunities
Core firms
Central companies in a strategic group
Secondary firms
Firms that use strategies related to but somewhat different from those of core firms
Strategic reference points
Targets that managers use to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage
Corporate level strategy
Overall organizational strategy that addresses the question
Diversification
Owning stocks in a variety of companies in different industries
Portfolio strategy
Corporate level strategy that minimizes risk by diversifying investment among various businesses or lines
Acquisitions
Other companies to buy
Unrelated diversification
Creating or squaring companies in completely unrelated business
BCG Matrix
Portfolio strategy that managers use to categorize their corporations businesses by growth rate and relative market share which helps decide how to invest corporate funds
Stars
Are companies that have a large share of fast growing market
Question marks
Are companies that have a small share of a fast growing market
Cash cows
Companies that have a large share of a slow growing market
Dogs
Companies that have a small share of a slow growing market often not profitable
Grand strategy
Broad strategic plan used to help an organization achieve its strategic goals
Growth strategy
To increase profits, revenues,market share, or the number of places in which the company does business
Stability strategy
Continue doing what they have been doing just doing it better
Grand strategy
A broad corporate level strategic plan used to achieve strategic goals and guide
Stability Strategy
A strategy that focuses on improving the way in which company sells the same products or services to the same customers
Retrenchment strategy
A strategy that focuses on turning around very company performance by shrinking the size or scope of the business
- making cost reductions by laying off employees close performing stores, offices,or manufacturing plants
- by closing or selling entire lines of products or services
Recovery
The strategic actions taken after retrenchment to return to a strategy
Industry level strategy
A corporate strategy that addresses the question “How should we compete in this industry”
Character of rivalry
A measure of the intensity of competitive be between companies in an industry
Purpose
To protect your company from the negative effects of industry competition and to create a sustainable competitive advantage
Cost leadership
Producing a product or service of acceptable quality consistently lower production cost than competitors can , so that the offer the product or service at the lowest price in the industry
Differentiation
Providing a product or service that is sufficiently different competitors offerings that customers are willing to pay a premium product
Focus strategy
Using cost leadership or differentiation to produce a specialized product or service for a limited specially targeted group of customers in a particular geographic region or market segment
Adaptive strategies
To chose an industry level strategy that is best suited to change an organizations external environment
Defenders?
Companies using an adaptive strategy
Prospectors
Companies using an adaptive strategy that seeks fast growth
Searching for new market opportunities
Encouraging risk takers
Being the first to bring innovative new products to market
Reactors
Do not follow a consistent
Firm level strategy
A corporate strategy that addresses the question should we compete against a firm
Direct competition
Rivalry between two companies that offer similar products or services ,acknowledge each other as rivals and act on each others market place
Market commonality
The degreee to which two companies have of products services or customers in multiple markets
Resource similarity
The extent to which a competitor has a similar and kinds of resources
Attack
A competitive move designed to reduce a rivals market share
A full attack strategy can provoke harsh retaliatory responses
Response
A counter move prompted by a rivals attack or improve a company’s market share or profit
Match or mirror competitors move
