Strategic Management Notes Flashcards

A comprehensive set of flashcards covering key concepts from strategic management, including definitions and strategic frameworks.

Strategy

A course of action (or a plan) for achieving a goal.

Profit Maximization

The central goal of businesses to earn lots of profits.

Competitive Advantage

A firm's theory about how to gain an edge over competitors.

Sustainable Competitive Advantage

A long-lasting competitive edge that is difficult for competitors to replicate.

Strategic Management Process

A sequential set of analyses and choices aimed at increasing the likelihood of choosing a good strategy.

Mission Statement

An organization's long-term purpose that defines what it aspires to be.

Objectives

Specific measurable targets used to evaluate a firm's realization of its mission.

External Analysis

Identification of critical threats and opportunities in the environment.

Internal Analysis

Identification of strengths and weaknesses within an organization.

Strategic Choice

The strategic actions a firm takes to achieve competitive advantage.

Business-Level Strategy

Actions a firm takes to achieve competitive advantage in a single industry or market.

Corporate-Level Strategy

Actions taken to succeed in multiple markets or industries simultaneously.

Cost Leadership

A strategy focusing on gaining a competitive advantage by reducing costs below those of competitors.

Differentiation Strategy

A business-level strategy aimed at increasing perceived benefits of products/services compared to competitors.

Value Chain

Sequence of business activities that a firm engages in to develop, produce, and market its product or services.

VRIO Framework

A tool for evaluating a firm's resources and capabilities based on Value, Rarity, Imitability, and Organization.

Operational Economies of Scope

Cost savings achieved when different businesses share one or more of the value chain activities.

Economies of Scale

A decrease in average costs as production volume increases.

SWOT Analysis

Framework for identifying Strengths, Weaknesses, Opportunities, and Threats.

Temporary Competitive Advantage

An advantage that lasts only a short period of time.

Competitive Parity

When economic value created by a firm is the same as the average firm.

Competitive Disadvantage

When economic value created by a firm is lower than that of the average firm.

Five Forces Model

A framework identifying the five key threats to a firm's ability to earn above-normal returns.

Emergent Strategy

Strategy that evolves over time as a result of actions taken by the firm, not necessarily planned.

Realized Strategy

The actual strategy that a firm pursues, which includes both intended and emergent strategies.

Demographics

Trends in the distribution of individuals in society concerning age, gender, marital status, etc.

Cultural Trends

Values, beliefs, and norms that guide behavior in society.

Economic Climate

Overall health of the economic system within which a company operates.

Legal and Political Conditions

Nature of the relationship between business and government.

Suppliers

Organizations that provide raw materials or other critical assets needed for a company to deliver its product or service.

Buyers

Organizations or individuals who purchase a company's products or services.

Threat of New Entry

The risk that new competitors will enter the industry.

Threat of Substitutes

The risk of customers finding a different product that satisfies the same need.

Rivalry Among Existing Competitors

The intensity of competition among current firms in the industry.

Barriers to Entry

Factors that increase the cost of entry or make entering a market difficult.

Cost of Capital

The rate of return a firm promises to pay to its capital suppliers.

Sustained Competitive Advantage

An advantage that lasts over a longer period of time and is difficult to copy.

Imitability

The ease or difficulty with which competitors can replicate a firm's advantages.

Competitive Strategy

How a company plans to gain a competitive edge in its market.

Organizational Structure

The way in which a company's activities are directed to achieve its goals.

Control Systems

Systems used by firms to ensure that individuals in the organization behave in ways that support strategy.

Compensation Policies

Reward systems designed to motivate employees towards achieving competitive advantage.

Dual Advantage Firm

A firm that successfully combines both cost leadership and differentiation strategies.

Core Competencies

Unique strengths and resources that provide competitive advantage.

Financial Economies of Scope

Cost savings achieved when different businesses can share financial resources or expertise.

Anticompetitive Economies of Scope

Cost advantages gained from diversification that reduce competition.

Limited Corporate Diversification

A strategy where most of a firm's business activities fall within a single industry.

Related Corporate Diversification

A strategy where less than 70% of revenues come from a single product and multiple businesses are linked.

Unrelated Corporate Diversification

A strategy where a firm's businesses have few common attributes.

Firm Profitability

A measure of the firm's ability to generate financial gain.

Strategic Implementation

The process of putting strategies into action within the organization.

Value Creation

The provision of products or services that create beneficial effects for customers.

Mission vs Vision

Mission refers to an organization's purpose, while vision refers to what it aspires to achieve.

Strategic Choice Model

Framework for understanding how firms make strategic decisions based on their analyses.

Mission Statement Elements

Core components that define an organization's mission including purpose and identity.

Organizational Identity

The self-concept of an organization; how it presents itself to its stakeholders.

Competitive Performance Measurement

Methods for quantifying the competitive advantage a firm has in the market.

Innovative Culture

A corporate culture that encourages creativity and innovation among employees.

Corporate Strategy

The overall scope and direction of a corporation as a whole.

Strategic Alignment

How well organizational resources and capabilities align with strategy.

Market Share

The portion of a market controlled by a particular company or product.

Differentiation vs Cost Leadership

Two primary business strategies that companies use to achieve competitive advantage.

Connection to Stakeholders

The relationships and communication between the organization and its stakeholders.

Environmental Scanning

The process of gathering, analyzing, and using information about trends and events in environments.

Industry Analysis

The examination of an industry to understand competitive dynamics and potential profitability.

Strategic Decisions

Choices made by a firm that define its long-term direction and goals.

Resource Allocation

The distribution of resources among various projects or business units.

Customer Value Proposition

The value delivered to customers through products or services.

Market Dynamics

The forces that impact the supply and demand of goods in a market.

First Mover Advantage

The competitive edge gained by being the first to enter a market.

Value-Added Activities

Operations within the value chain that enhance the worth of a product or service.

Shareholder Value

The value delivered to shareholders in return for their investment.

Competitive Rivalry

The ongoing battle for market share among competing firms.

Economies of Complexity

Cost advantages that arise from complex organizational structures or operations.

Disruptive Innovation

Innovations that significantly alter the way industries operate.

Market Positioning

The process of establishing the image of a brand or product in comparison to competitors.

Resource-Based Strategy

A strategy focusing on utilizing a firm's unique resources for competitive advantage.

Strategic Resources

Assets that are critical for a company to achieve its goals.

Market Penetration Strategy

A strategy to increase market share in existing markets.

Acquisition Strategy

A strategy to grow a firm through purchasing other businesses.

Strategic Diversification

Broadening a firm’s operations in different products or markets.

Cost Control Management

Systems and processes for overseeing and managing a firm’s expenses.

Industry Lifecycle

The stages of growth and decline that an industry goes through over time.

Brand Loyalty

The tendency of consumers to continuously purchase a specific brand.

SWOT Elements

Strengths, Weaknesses, Opportunities, and Threats identified during strategic analysis.

Stakeholder Theory

A theory that suggests that an organization should consider the interests of all its stakeholders.

Promotional Activities

Marketing efforts aimed at increasing product awareness and sales.

Long-Term Strategy

Plans focused on achieving goals over an extended period.