MAN 4720 (Capstone) UCF - Midterm Exam - Spring 2026 (Christopher Leo) - Quizlet V1

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MAN 4720 (Capstone) - Midterm Exam - Spring 2026 (Christopher Leo)

Strategy

Goal-directed actions a firm takes to gain and sustain a competitive advantage.

Strategic Management

The process of analyzing, formulating, and implementing strategy to achieve competitive advantage.

Competitive Advantage

The ability of a firm to outperform its competitors and earn above-average returns.

AFI Framework

A strategic management framework consisting of Analysis, Formulation, and Implementation.

Analysis (AFI Framework)

Examining the external and internal environment to identify opportunities and threats.

Formulation (AFI Framework)

Developing the strategy that will allow the firm to achieve competitive advantage.

Implementation (AFI Framework)

Putting the chosen strategy into action through structure, processes, and systems.

Vision Statement

A statement describing what an organization ultimately wants to become in the future.

Mission Statement

A statement explaining a company's purpose and what it does for its stakeholders.

Core Values

The fundamental beliefs and principles that guide a company's behavior and decision making.

External Environment

Factors outside a company that influence its performance and competitive position.

Internal Environment

The firm's resources, capabilities, and competencies that influence its competitive advantage.

PESTEL Analysis

A framework used to analyze the macro-environment using Political, Economic, Social, Technological, Environmental, and Legal factors.

Political Factors (PESTEL)

Government actions such as taxes, tariffs, regulations, and trade restrictions that affect business.

Economic Factors (PESTEL)

Economic conditions such as inflation, GDP growth, unemployment, and interest rates.

Sociocultural Factors (PESTEL)

Cultural trends, demographics, and social attitudes that affect consumer behavior.

Technological Factors (PESTEL)

Advancements in technology that influence innovation, automation, and product development.

Environmental Factors (PESTEL)

Ecological and environmental issues such as climate change, pollution, and sustainability.

Legal Factors (PESTEL)

Laws and regulations that govern business practices.

Porter's Five Forces

A framework used to analyze industry profitability and competitive intensity.

Industry Rivalry

The intensity of competition among existing firms in an industry.

Threat of New Entrants

The possibility that new competitors can enter the market and increase competition.

Threat of Substitutes

The presence of alternative products that satisfy the same customer need.

Bargaining Power of Buyers

The ability of customers to influence prices and demand higher quality.

Bargaining Power of Suppliers

The ability of suppliers to influence prices or reduce the quality of inputs.

Industry Attractiveness

The degree to which an industry allows firms to earn profits.

Strategic Group

A group of companies in an industry that follow similar strategies.

Strategic Group Map

A visual tool used to plot companies in an industry based on strategic characteristics.

Structure-Conduct-Performance (SCP) Model

A model explaining how industry structure influences firm behavior and industry performance.

Industry Structure (SCP)

The number and size of firms in an industry and how they compete.

Firm Conduct (SCP)

The strategies and actions firms take within an industry.

Industry Performance (SCP)

The overall profitability and outcomes within an industry.

Perfect Competition

A market with many sellers offering identical products with no control over price.

Monopolistic Competition

A market with many firms offering differentiated products.

Oligopoly

A market dominated by a small number of firms with significant influence over price.

Monopoly

A market with one seller controlling the entire industry.

Resource-Based View (RBV)

A theory that competitive advantage comes from a firm's unique resources and capabilities.

Resources

Assets a firm owns or controls that can be used to create value.

Capabilities

The firm's ability to use its resources effectively.

Core Competencies

Unique strengths that result from combining resources and capabilities.

Tangible Resources

Physical assets such as buildings, equipment, and cash.

Intangible Resources

Non-physical assets such as brand reputation, patents, and knowledge.

Dynamic Capabilities

A firm's ability to adapt and reconfigure resources to respond to changing environments.

Value Chain

A model that shows how a firm adds value to a product at each stage of production.

Primary Activities (Value Chain)

Activities directly involved in producing and delivering a product.

Inbound Logistics

Receiving, storing, and managing raw materials.

Operations

Transforming inputs into finished products.

Outbound Logistics

Distributing products to customers.

Marketing and Sales

Promoting and selling products to customers.

Service

Supporting customers after the sale.

Support Activities (Value Chain)

Activities that help primary activities function effectively.

Firm Infrastructure

Organizational structure, control systems, and company culture.

Human Resource Management

Recruiting, training, and retaining employees.

Technology Development

Innovation, R&D, and technological improvements.

Procurement

Purchasing raw materials and inputs.

VRIO Framework

A tool used to determine whether a resource provides competitive advantage.

Valuable (VRIO)

A resource that helps exploit opportunities or reduce threats.

Rare (VRIO)

A resource that is possessed by few competitors.

Costly to Imitate (VRIO)

A resource that competitors cannot easily copy.

Organized to Capture Value (VRIO)

The firm has systems and processes to fully utilize the resource.

Competitive Parity

Occurs when a resource is valuable but not rare.

Temporary Competitive Advantage

Occurs when a resource is valuable and rare but easy to imitate.

Sustained Competitive Advantage

Occurs when a resource is valuable, rare, costly to imitate, and well organized.

Competitive Disadvantage

Occurs when a firm lacks valuable resources.

SWOT Analysis

A framework used to evaluate a firm's strengths, weaknesses, opportunities, and threats.

Strengths

Internal capabilities that provide an advantage.

Weaknesses

Internal limitations that place a firm at a disadvantage.

Opportunities

External factors the firm can exploit for advantage.

Threats

External factors that could harm the firm.

Economic Value Creation

The difference between the value perceived by customers and the cost to produce the product.

Accounting Profitability

Financial performance measured using accounting ratios such as ROIC.

Shareholder Value

Value created for investors through stock price appreciation and dividends.

Balanced Scorecard

A framework that evaluates firm performance using financial and non-financial measures.

Triple Bottom Line

A framework measuring performance based on people, planet, and profit.

Business Model

How a company makes money.

Business Strategy

How a company competes in its market.

Porter's Generic Strategies

Strategies firms use to achieve competitive advantage.

Cost Leadership

Competing by offering the lowest cost products in an industry.

Differentiation

Competing by offering unique products valued by customers.

Focused Cost Leadership

Providing low-cost products to a specific market segment.

Focused Differentiation

Providing unique products to a specific niche market.

Best-Cost Strategy

A strategy that combines elements of both differentiation and low cost.

Stuck in the Middle

When a firm fails to achieve either cost leadership or differentiation.

Strategic Management Goal

To achieve and sustain competitive advantage.

Strategy vs Operational Effectiveness

Strategy involves choosing a unique position while operational effectiveness focuses on performing similar activities better than rivals.

Competitive Advantage Requirement

A firm must create more economic value than competitors.

Economic Value Creation Formula

Value (what customers are willing to pay) minus Cost (cost to produce the product).

Higher Value Strategy

Creating competitive advantage by increasing perceived value to customers.

Lower Cost Strategy

Creating competitive advantage by reducing production costs.

Industry

A group of firms producing similar products or services.

Direct Competitors

Firms operating within the same industry.

Indirect Competitors

Firms offering substitute products from different industries.

Substitutes

Products from different industries that satisfy the same customer need.

General Environment

Broad societal factors affecting multiple industries.

Industry Environment

The competitive forces affecting firms within the same industry.

Example of Industry Rivalry

Competitors lowering prices or increasing advertising to gain customers.

Factors Increasing Rivalry

Slow industry growth, high fixed costs, lack of differentiation, high exit barriers.

Exit Barriers

Obstacles that make it difficult for firms to leave an industry.

Examples of Exit Barriers

Emotional attachment, specialized assets, contractual obligations.