Chapter 7 Flashcards
a comprehensive plan guiding resource allocation to achieve long-term organization goals.
strategy
focuses organizational energies on achieving a compelling goal.
Strategic intent
an ability to outperform rivals.
competitive advantage
achieved in ways that are difficult to imitate.
sustainable competitive advantage
sets long-term direction for the total enterprise.
corporate strategy
identifies how a division or strategic business unit will compete in its product or service domain.
business strategy
guides activities within one specific area of operations.
functional strategy
involves expansion of the organization’s current operations.
growth strategy
Growth through __________means expansion within an
existing business area.
concentration
Growth through _________ means expansion by entering related or new business areas.
diversification
Growth through ___________ occurs by acquiring suppliers or distributors.
vertical integration
seeks to correct weaknesses by making radical changes to current ways of operating.
retrenchment strategy
occurs when a business closes and sells its assets to pay creditors.
Liquidation
involves making major changes to cut costs, gain short-term efficiencies, and buy time to try new strategies to improve future success.
Restructuring
protects an insolvent firm from creditors during a period of reorganization to restore profitability.
Chapter 11 bankruptcy
decreases the size of operations.
Downsizing
involves selling off parts of the organization to refocus attention on core business areas.
Divestiture
adopts standardized products and advertising for use worldwide.
globalization strategy
tries to operate globally without having a strong national identity.
transnational firm
organizations join together in partnership to pursue an area of mutual interest.
strategic alliance
the strategy of working with rivals on projects of mutual benefit.
Co-opetition
strategically uses the Internet to gain competitive advantage.
e-business strategy
uses ITand Web portals to link organizations vertically in supply chains.
B2B business strategy
Advertising model Brokerage model Community model Freemium model Infomediary model Merchant model Referral model Subscription model
Web-Based Business Models
Provide free information or services and then generate revenues from paid advertising to viewers (e.g., Yahoo!, Google)
Advertising model
Bring buyers and sellers together for online business transactions and take a percentage from the sales (e.g., eBay, Priceline)
Brokerage model
Provide a meeting point sold by subscription or supported by advertising (e.g., eHarmony, Facebook)
Community model
Offer a free service and encourage users to buy extras (e.g., Skype, Zynga)
Freemium model
Provide a free service while collecting information on users and selling it to other businesses (e.g., Epinions, Yelp)
Infomediary model
Sell products direct to customers through the Web—e-tailing (e.g., Amazon, Apple iTunes Store)
Merchant model
Provide free listings and get referral fees from online merchants after directing customers to them (e.g., Shopzilla, PriceGrabber)
Referral model
Sell access to high-value content through a subscription Web site (e.g., Netflix, Wall Street Journal Interactive)
Subscription model
uses ITand Web portals to link businesses with customers.
B2C business strategy
uses social media to better engage with an organization’s
customers, clients, and external audiences in general.
social media strategy
uses the Internet to engage customers and potential customers in providing opinions and suggestions on products and their designs.
crowdsourcing strategy
the process of formulating and implementing strategies.
Strategic management
the process of creating strategies.
Strategy formulation
the process of putting strategies into action.
Strategy implementation
the organization’s reason for existence in society.
mission
are specific results that organizations try to accomplish.
Operating objectives
examines organizational strengths and weaknesses, as well as environmental opportunities and threats.
SWOT analysis
a special strength that gives an organization a competitive advantage.
core competency
Force 1: Competitors—intensity of rivalry among firms in the industry
Force 2: New entrants—threats of new competitors entering the market
Force 3: Suppliers—bargaining power of suppliers
Force 4: Customers—bargaining power of buyers
Force 5: Substitutes—threats of substitute products or services
Porter’s five forces model
offers products that are unique and different from those of the competition.
differentiation strategy
seeks to operate with lower costs than competitors.
cost leadership strategy
offers a unique product to a special market segment.
focused differentiation strategy
seeks the lowest costs of operations within a special market segment.
focused cost leadership strategy
analyzes business opportunities according to market growth rateand market share.
BCG Matrix
inspires people to implement organizational strategies.
Strategic leadership
makes sure strategies are well implemented and that poor strategies are scrapped or changed.
Strategic control
