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Strategic Competitiveness
Firms achieve this by successfully formulating and implementing a value creating strategy.
Strategy
Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage.
Competitive advantage
when, by implementing its strategy, a firm creates superior value for customers, and when competitors are not able to imitate the value the firm’s products create or find it too expensive to attempt imitation.
Above-average returns
returns in excess of what an investor expects to earn from other investments with a similar amount of risk.
Risk
an investor’s uncertainty about the economic gains or losses that will result from a particular investment.
Average Returns
Returns equal to those an investor expects to earn from other investments possessing a similar amount of risk.
Strategic Management Process
Full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above- average returns.
A-S-P Model
Analysis:
— Analyzing external environment and internal organization to identify external opportunities and threats and to recognize its internal resources, capabilities, and core competencies
Strategy:
— analysis influence strategy. Strategy entails strategy formulation and strategy implementation.
Performance:
—To implement its strategies, the firm takes action to enact each one with the intent of achieving strategic competitiveness and above-average returns
Digitalization
The process of converting something to digital form. Competitive dimension that is affecting competition in multiple industries throughout the world.
Hypercompetition
condition in which competitors engage in intense rivalry, markets, change quickly and often, and entry barriers are low. In these types of environments, firms can find it difficult to maintain a competitive advantage.
Gobal Economy
one in which goods, services, people, skills, and ideas move with limited barriers across geographic borders.
Tariff
Tax imposed by a government on goods imported into their country.
Protectionism
involves actions taken by a government to protect its economy from adverse influences due to foreign trade.
Globalization
the increasing economic interdependence among countries and their organizations as reflected in the flow of products, financial capital, and knowledge across country borders.
Global Supply Chain
Network of firms that spans multiple countries with the purpose of supplying goods and services.
Liability of Foreignness
the risks of competing outside a firm’s domestic markets
Global Value Chain
refers to the process through which a firm receives raw materials, uses them to add value though the manufacturing a product that provides greater utility for the consumer, and sells the product to another firm or the ultimate consumer of the product, in a global setting
global supply chain refers to an industry, whereas a global value chain pertains to an individual firm as it seeks to create, in part, through its management of a global supply chain.
Technology Diffusion
the speed at which new technologies become available to firms and when firms choose to adopt them, is far greater than was the case a decade or two ago.
Perpetual Innovation
term used to describe how rapidly, and consistently new, information-intensive technologies replace older ones.
Disruptive Technologies
technologies that destroy the value of an existing technology and create new markets - surface frequently in today’s competitive markets.
Knowledge
the basis of technology and its application
Big Data
refers to the data retrieved by firms that are increasing in volume, variety, and frequency
Big Data Analytics
the process of examining huge amount of data to uncover hidden patterns and other information that can be used to improve decision making.
Strategic Flexibility
set of capabilities firms use to respond to various demand and opportunities existing in today’s dynamic and uncertain competitive environment.
Sustainability
a firm should not deplete or destroy natural elements upon which it depends for survival.
Greenwashing
when companies exaggerate the activities of the firm in areas such as protecting the environment
Uniqueness
the basis of a firm’s strategy and its ability to earn above-average returns
Resources
inputs into a firm’s production process, such as capital equipment, the skill of individual employees, patents, finances, and talented managers.
Capability
the capacity for a set of resources to perform a task or an activity in an integrative manner
Core Competencies
capabilities that serve as a source of competitive advantage for a firm over its rivals
Stakeholders
individuals, groups, and organizations that can both influence and are affected by the objectives, actions, and outcomes of a firm.
Primary Stakeholders
directly involvd in the value-creating processes of the firm
Secondary Stakeholders
can both influence and are influenced by what the firm does, but they do not contribute directly to the value the firm creates
Fairness
one of the fundamental drivers of reciprocity
organizational justice
fairness
Distributional Justice
stakeholders feels as though they are receiving value through their relationship with their firm that is commensurate with what they contribute to the firm
Procedural Justice
means that the firm listens to stakeholders and considers their positions when making important decisions that are likely to affect them.
Interactional Justice
means that all stakeholders are treated with honesty, respect, and integrity. Formal and informal contracts are made and kept.
Arms-Length Transactions
the firm doesn’t try to develop close relationships with stakeholders, but simply responds to market forces in buying and selling products and other resources.
Vision
Picture of what the firm wants to be and, in broad terms, what it wants to achieve.
Mission
specifies the businesses in which the film intends to compete and the customers it intends to serve.
Values
define what should matter most to managers and employees when they make and implement strategic decisions.
Strategic Leaders
people located in different areas and levels of the firm using the strategic management process to select actions that help the firm achieve its vision, fulfill its mission, and adhere to its values.
Organizational Culture
refers to the complex set of ideologies, symbols, and core value that individuals throughout the firm share and that influence how the firm conducts business.
General Environment
composed of dimensions in the broader society that influence an industry and the firms within it.
Industry Environment
set of factors that directly influences a firm and its competitive actions and responses: the threat of new entrants, the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competing firms.
Competitor Analysis
how companies gather and interpret information about their competitors
External Environment Analysis
4 parts: Scanning, Monitoring, Forecasting, Assessing
Scanning
Identifying early signals of environmental changes and trends
Monitoring
Detecting meaning though ongoing observations of environmental changes and trends
Forecasting
Developing projections of anticipated outcomes based on monitored changes and trends
Assessing
Determining the timing and importance of environmental changes and trends for firm's’ strategies and their management
Opportunity
condition in the general environment that if exploited effectively helps a company achieve strategic competitiveness
Threat
condition in the general environment that may hinder a company’s efforts to achieve strategic competitiveness
Scanning
entails the study of all segments in the general environment Mi
Monitoring
analysts observe environmental changes to see if an important trend is emerging from among those spotted through scanning
Assessing
The objective is to determine the timing and significance of the effects of environmental changes and trends that have been identified.
Demographic Segment
Concerned with a population’s size, age structure, geographic distribution, ethnic mix, and income distribution
Economic Environment
Refers to the nature and direction of the economy in which a firm competes or may compete.
Political / Legal Segment
arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding interactions among nations as well as between firms and various government agencies.
Sociocultural Segment
concerned with a society’s attitude and cultural values
Technological Segment
includes the institutions and activities involved in creating new knowledge and translating that knowledge into new outputs, products, processes and materials
Global Segment
includes relevant new global markets and their critical cultural and institutional characteristics, existing markets that are changing, and important international political events.
Sustainable Physical Environment Segment
refers to potential and actual changes in the physical environment as well as business practices that are intended to positively respond to those changes in order to create a sustainable environment.
Industry
a group of firms producing products that are close substitutes.
Strategic Group
set of firms emphasizing similar strategic dimensions and using a similar strategy.
Future Objectives
What drives a competitor
Current Strategy
What the competitor is doing and can do
Assumptions
What the competitor believes about the industry
Strengths and Weaknesses of
What the competitor’s capabilities are, as shown by its strengths and weaknesses
Competitor Intelligence is
which set of data and information the firm gathers to better understand and anticipate competitors’, objectives, strategies, assumptions, and capabiltities.
Complementors
companies or networks of companies that sell complementary goods or services.
Business Ecosystem
complex network of interconnected organizations - suppliers, customers, government agencies technology suppliers, financiers, and other stakeholders - whose competitive and cooperative efforts are associated with the satisfaction of particular value proposition.
Global Mind-Set
the ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.
Value
measured by a product’s performance characteristics and by its attributes for which customers are willing to pay.
Strategic Human Capital
allows a firm to develop capabilities through matching the knowledge, skills, and abilities of their employees to particular strategic objectives.
Valuable Capabilities
Help a firm neutralize threats or exploit opportunities
Rare Capabilities
Are not possessed by many others
Costly - To -Imitate Capabilities
Historical: unique and a valuable organizational culture or brand name
Ambiguous: The causes and uses of a competence are unclear
Social Complexity: Interpersonal relationships, trust, and friendship among managers, suppliers, and customers
Non sustainable Capabilities
No strategic equivalent
Valuable Capabilities
allow the firm to exploit opportunities or neutralize threats in its external environment
Rare Capabilities
capabilities that few, if any, competitors posses
Costly-to-imitate capabilities
capabilities that other firms cannot easily develop
Non substitutable Capabilities
capabilities that do not have strategic equivalents.
Competitive Parity
no firm has a significant advantage over the other in any particular capability
Value Chain Activities
activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers.
Support Functions
include activities or tasks the firm completes in order to support the work being done to produce, sell, distribute, and service the products the firm is producing.
Value Creation System
each part of a system depends on other parts of the system to create value.
Social Capital
When firms have strong positive relationships with stakeholders
Outsourcing
the purchase of a value-creating activity or a support function activity from an external supplier
Core Rigidities
Occur due to overdependence on a particular core competence even when situations change, and the core competence is no longer generating a competitive advantage.
Digital Strategy
uses digital technology to help a firm understand its customers and their needs with greater clarity as a foundation for developing innovations that create more value for those customers
Business - Level Strategy
an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in a specific product market
Core Strategy
the strategy that the firm forms to describe how it intends to compete against rivals on a day-to-day basis in its chosen product market
Reach
revolves around the firm’s access and connection to customers
Richness
concerns the depth and detail of the two-way flow of information between the firm and customers
Affiliation
the third dimension, concerned with encouraging ongoing customer interactions
Market Segmentation
the process of dividing customers into groups based on their needs
Business Model
describes what a firm does to crate, deliver, and capture value for its stakeholders
Business Model Innovation
occurs when a firm determines that its current business model is outdated and successfully replaces it with a newer one
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