MAN4720 Exam 1 Study.docx

Technological change

A new competitive dimension affecting competition in multiple industries globally.

Global economy

An economy in which goods, services, people, skills, and ideas move freely across geographic borders.

Globalization

The process that increases the range of opportunities for companies competing in today's landscape.

Liability of foreignness

The costs associated with operating in a foreign market.

Disruptive technologies

Technologies that destroy the value of an existing technology and create new markets.

Perpetual innovation

The rapid and consistent replacement of older technologies with new, information-intensive ones.

Strategic flexibility

The set of capabilities used to respond to various demands and opportunities.

Resources

The inputs into a firm’s production process, such as capital equipment and skilled employees.

Core competencies

Capabilities that serve as a competitive advantage for a firm over its rivals.

I/O Model of Above-Average Returns

Explains the external environment's dominant influence on strategy choice and actions.

Mission

Informs stakeholders what the firm is, what it seeks to accomplish, and who it serves.

Vision

Describes what the firm wants to become and how it desires to serve its stakeholders.

Stakeholders

Individuals and groups that can affect the firm’s vision and mission.

Product market stakeholders

Comprised of the firm’s primary customers, suppliers, and host communities.

Strategic management process

A rational approach firms use to achieve strategic competitiveness and earn above-average returns.

Strategies

Actions firms take to buffer themselves from negative environmental effects and pursue opportunities.

General environment

The segments that make up demographic, economic, political/legal, sociocultural, technological, global, and sustainable physical.

Industry environment

Factors that directly influence a firm and its competitive actions.

Five Forces of Competition

Focuses on factors influencing an industry’s profitability potential.

Scanning

Method firms use to identify early signals of potential changes in the general environment.

Demographic segment

Concerned with a population’s size, age structure, geographic distribution, and ethnic mix.

Economic segment

Refers to the nature and direction of the economy in which a firm competes.

Political/legal segment

The arena in which organizations compete for attention and resources regarding laws and regulations.

Sociocultural segment

Concerned with society’s attitudes and cultural values.

Global segment

Recognizes that globalization may create opportunities and threats for the firm.

International strategy

Used by firms to increase internationalization by focusing on global niche markets.

Economies of scale

The cost of producing each unit declines as the quantity produced increases.

Complementors

Companies or networks that sell goods or services compatible with the focal firm’s offerings.

Transnational mindset

Recognizes the need for resources and capabilities to respond to competitive situations influenced by culture.

Capabilities

Created by innovatively bundling and leveraging resources to form competitive advantages.

Uncertainty

A condition that affects managers when analyzing the internal organization.

Tangible resources

Includes production equipment, facilities, and formal reporting structures.

Intangible resources

Includes knowledge, trust, brand reputation, and organizational culture.

Social capital

Characterizes strong positive relationships with suppliers and customers.

Outsourcing

Purchasing a value-creating activity from an external supplier.

Offshoring

The practice of outsourcing to a foreign supplier.

Strategic resources

Resources with the potential to be developed into core competencies.