Chp 5 Principles of management vocab

Resources

the assets, capabilities, processes, employee time, info, and knowledge that an organization uses to improve its efficiency and effectiveness, create and sustain competitive advantage, and fulfill a need or solve a problem

Competitive advantage

providing greater value for customers that competitors can

Sustainable competitive advantage

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

Valuable reources

a resource that allows companies to improve their efficiency and effectiveness

rare resource

a resource that is not controlled or possessed by many competing firms

Non substitutable resource

a resource that provides value or competitive advantage and has no equivalent substitutes or replacements

Competitive inertia

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

strategic dissonace

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

SWOT analysis

the assessment of the strengths and weaknesses in an organizations internal environment and the opportunities and threats in its external 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

Strategic group

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

Core firms

the central companies in a strategic group

secondary firms

follow strategies related to but somewhat different from those of the core firms

Strategic reference points

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

Corporate level strategy

the overall organizational strategy that addresses the question “what business or businesses are we in or should we be in?”

Diversification

reducing risk by buying a variety of items so that the failure of one stock or one business does ot doom the entire portfolio

Portfolio strategy

minimizes risk by diversifying investment among various businesses or product lines

acquisition

the purchase of a company by another company

unrelated diversification

creating or acquiring companies in completely unrelated businesses

BCG matrix

categorizes a corporations businesses by growth rate

Star

a company with a large share of fast growing market

Question mark

small share of a fast growing market

Cash cow

large share of a slow growing market

dog

small share of a slow growing market

Related diverstification

creating or acquiring companies that share similar products

Grand strategy

Achieve strategic goals and guide the strategic alternatives that mangers of individual businesses or subunits may use

growth strategy

focuses on increasing profits

Stability strategy

focuses on improving the way in which the company sells the same products or services to the same customers

Retrenchment strategy

focuses on turning around very poor company performance by shrinking the size or scope of the business

Recovery

actions taken after retrenchment to return to a growth strategy

Industry level strategy

focuses on how companies choose to compete in their industries

Character of the rivalry

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

Threat of new entrants

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

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

Bargaining power of suppliers

influence that suppliers in an industry have on the prices of these inputs

bargaining power of buyers

measure of the influence that customers have on a firm’s prices

Cost leadership

Product or service at consistently lower production costs than competitors

Differentiation

sufficiently different from competitors offering that customers are willing to pay a premium price for it

Focus strategy

produce a specialized product or service for a limited, specifically targeted group of people

Defenders

defending strategic positions

Prospectors

companies that seek fast growth by searching for new market opportunities

Analyzers

seeks to minimize risk and maximize profits by following or imitating the proven successes of prospectors

Reactors

reacting to changes in the external environment after they occur

Firm-level strategy

“How should we compete against a particular firm?”

Direct competition

the rivalry between two companies that offer similar products and services

Market commonality

two companies have over lapping products, services, or customers in multiple markets

Resource similarity

the extent to which a competitor has similar amounts and kinds of resources

Attack

Move desinged to reduce a rival’s market share or profits

Response

countermove prompted by a rival’s attack