Vocab Flashcards
A corporate action in which a company buys most, if not all of the target company’s ownership stakes in order to assume control of the target firm. They are often made as part of a company’s growth strategy whereby it is most beneficial to take over an existing firm’s operations and niche compared to expanding on its own.
Acquisition
A sequence of steps that must be taken, or activities that must be successfully performed for a strategy to succeed. It has three major elements
- specific tasks : what will be done and by whom
- time horizon : when will it be done
- ressource allocation : what specific funds are available for specific activities
Action plan
Final decisions and predictions are unduly influenced by initial information that is given more weight in the decision process
Anchoring
Information that is taken for fact without inspection
Assumption
Discrete processes required to create, produce, sell and deliver products including but not limited to R&D, inbound logistics, sales, assembling final products, and training employees
Activities
The process of gaining a better understanding of a complex topic by breaking it into smaller parts
Analysis
When input sources are moved into the firm’s primary activity
Backward intergration
When a firm focuses ressources on one key area, usually a smaller market segment or production category, and winning that market first to use it as a platform to break into the market category
Beach-head strategy
What needs to be overcome by new entrants if they are to compete successfully. Factors created by incumbent firms to deter competition
Barriers to entry
The value that an asset can be carried for on the balance sheet
Book value
Describes the rationate of how an organization creates, delivers and captures value
Business model
How an individual business competes in its particular marketplace. Its focus is orchestrating activities in the pursuit of competitive advantage.
Business-level strategy
The orchestration and use of firm ressources
Capability
Any feature of the business environment, either internal or external, which necessitates the intelligent application of ressources and capabilities to surmount
Challenge
A number of things growing, fastened, or occuring close together as in a group or a bunch
Cluster
The activity that causes commercial firms to develop new products, services, markets and technologies, which would give customers great selection and better products
Competition
How a business is able to orchestrate its activities to offer its customers great value, eather by means of lower prices, or by providing greater benefits and services that justifies a higher price.
Competitive advantage
A product that is used in conjunction with another product. Usually it has little to no value when consumed alone, but when combined with another product, it adds to the overall value of the offering.
Also, the product tends to have more value when paired with its thing than it does by itself.
Complement
A SBU with a high market share in a low growth market
Cash Cow (BCG Matrix)
Insights / ideas deducted from findings
Conclusion
The degree to which a small number of firms provide a major portion of the insustry’s total production
Concentrated Industry
A limitation or restriction
Contraint
When a firm can orchestrate its activities to sell its products either at average industry prices to earn a profit higher than its rivals, or below average industry prices to gain additional market share
Cost leadership
The primary activity that defines the firm’s main emphasis.
Core business
Is concerned with the overall scope of the organization and how value is added to the constituent business of the organization as a whole
Corporate-level strategy
When a corporation uses funds not generated from profitable business to build and maintain operations of unprofitable businesses until they become profitable
Cross subsidize
The collective learning in the organization, especially how to co-ordinate diverse capabilities and integrate multiple ressources.
Core competence
The few necessary factors, activities or conditions required for ensuring the success of a projet or firm
Critical Sucess Factors - CSF
Key Success Factors - KSF
FCS
The problem solving process of identifying patterns from a reasonably complete set of data
Deduction
Involves uniqueness in some dimension that is sufficiently valued by customers to allow a price premium.
- good R&D, innovation
- high quality products
- effective sales and marketing
- high level of customer service
Differentiation
Expected performance outcomes of a strategic action in terms of return, risk and stakeholder expectations
Acceptability
The process by which something (ie innovation, products, information) spreads among a population
Diffusion
Creates substancial growth by offering a new performance trajectory that, even if initially inferior to the performance of existing products, has the potential to become markedly superior and will undermine an industry’s status quo business model
Disruptive innovation
When a firm enters an industry different from its existing businesses. Reasons include :
- reducing risk of relying on only one or few income sources
- avoiding cyclical or seasonal fluctuations by producing goods or services with different demand cycles
- achieving a higher growth rate
- countering a competitor by invading the competitor’s core industry or market. In contrast to vertical integration, it does not increase a firm’s market or monopolistic power
Diversification
Factors making it more difficult for a firm to get out of a particular business than it would otherwise have been. They include things like the cost of laying off staff, and long term contractual obligations with suppliers including rent, and other critical materials.
Exit barriers
The act of making a process, good or service easy to obtain by making it as uniform, plentiful and affordable as possible.
Something becomes like that when one offering is nearly indistinguishable from another. The more a good is this way, the more difficult it is for firms to achieve a price premium
Commoditization
The sale of a part of the firm (usually SBU) to a third party for cash or other financial considerations
Divestiture
SBUs with low market share in static or declining markets
Dog (BCG Matrix)
When the per-unit cost of production drops as the volume of output rises. This can occur because of technological reasons or because of higher bargaining power (lower input supply sources)
Economies of scale
Efficiency gains made through applying the organization’s existing ressources or capabilities to new markets or services
For ex, many universities have large ressources in terms of student residences (accomodation), which they need for their students, but which are under-utilized when semesters are over. These residences are more efficiently used if the universities expand their scope of activities into holding conferences.
Economies of scope
When output activities are moved into the firm’s owned activities
Forward integration
Answers if a firm has the necessary components to achieve a result and if that result is attractive in terms of return and risk
Feasability
Factual and verifiable statements
Findings
When an organization is better off than its competitors because it was the first to market with a product or service
First-mover advantage
Expresses the degree to which an organization matching its ressources and capabilities with the challenges and opportunities of the external environment
Fit
A cost that does not change with an increase or decrease in the amounts of goods or services produced. It has to be paid by a company, independant of any business activity
Fixed costs
An industry that contains many small or relatively small competitors and no, or few leaders in each relevant geographic and / or product market
Fragmented industry
Erroneously believing that the onset of a random event is less or more likely to happen following an event or a series of events.
For example, consider a series of 20 coin flips that have all landed with the “heads” side up. Under the gambler’s fallacy, a person might predict that the next coin flip is more likely to land with the “tails” up
Gambler’s fallacy
Relates to how effectively standardized products or services can be introduced into international markets versus the need to adapt them to local markets
Global-local dilemma
