Global Strategy Lecture Flashcards

Vocabulary flashcards based on lecture notes covering strategy tripod, industry competition, leveraging resources, and institutions, cultures, and ethics in global business.

Strategy Tripod

A framework consisting of the Industry-Based View, Resource-Based View, and Institution-Based View to understand firm strategy.

Industry-Based View

A strategic perspective emphasizing external forces such as market structure, competitive rivalry, entry barriers, and buyer/supplier power (Porter's Five Forces).

Resource-Based View

A strategic perspective stating firm success depends on internal capabilities and resources that are valuable, rare, inimitable, and organized (VRIO).

Institution-Based View

A strategic perspective recognizing that firms operate within formal (laws, regulations) and informal (culture, norms) institutional frameworks that shape strategy.

Semiglobalization

A concept reflecting that despite advances in technology and trade, national borders, legal systems, and cultural values still matter strategically, requiring a balance of global scale with local adaptation.

Intrapreneurship

The process where internal advocates within a firm champion strategic visions and innovations by combining storytelling, data, and cultural understanding.

Globalization vs. Deglobalization

A core debate concerning whether global economic, political, and cultural integration is reversing.

Just-in-Time (JIT)

An inventory strategy emphasizing efficiency but can be fragile in the face of uncertainty.

Just-in-Case (JIC)

An inventory strategy emphasizing resilience and preparedness for uncertainty, often involving buffer stocks.

Rivalry Among Competitors

One of Porter's Five Forces, describing intense competition that can lead to price wars, ad wars, and innovation races, requiring firms to differentiate or dominate costs.

Threat of New Entrants

One of Porter's Five Forces, where low entry barriers invite disruptors, necessitating firms to build defenses like strong brands or patents.

Bargaining Power of Suppliers

One of Porter's Five Forces, where few suppliers or specialized inputs give suppliers high power to squeeze firm margins.

Bargaining Power of Buyers

One of Porter's Five Forces, where informed buyers and low switching costs give buyers power to pressure firms for lower prices or higher quality.

Threat of Substitutes

One of Porter's Five Forces, where alternatives from outside the industry reduce a firm's pricing power.

Strategic Group

A set of firms within the same industry that pursue similar strategies, leading to fiercest competition within these groups.

Stuck in the Middle

Porter's theory that firms attempting to simultaneously pursue cost leadership and differentiation without clear operational excellence risk underperforming instead of achieving either effectively.

Industry-specific Performance Drivers

Factors shaping profitability based on the nature of the industry itself, such as industry structure and rivalry.

Firm-specific Performance Drivers

Factors influencing a firm's performance based on its unique internal resources, leadership, and capabilities.

VRIO Framework

An acronym for Value, Rarity, Imitability, and Organization, used to analyze a firm's internal resources and capabilities as sources of competitive advantage.

Value (VRIO)

A characteristic of a resource or capability that helps a firm exploit opportunities or neutralize threats.

Rarity (VRIO)

A characteristic of a resource or capability that few other firms possess.

Imitability (VRIO)

A characteristic of a resource or capability that is difficult or costly for other firms to replicate due to factors like history, complexity, or legal protection.

Organization (VRIO)

A characteristic referring to whether a firm is structured and managed effectively to fully utilize its valuable, rare, and inimitable resources and capabilities.

Dynamic Capabilities

A firm0s ability to adapt, integrate, and reconfigure internal and external resources in response to environmental change, crucial for strategic agility and survival in volatile industries.

Value Chain

A framework that breaks down a firm0s total activities into primary (e.g., operations, marketing) and support (e.g., HR, technology) functions to identify sources of differentiation or cost advantage.

Crisis-readiness

A core capability demonstrated by firms like H-E-B, involving advanced preparation, decentralized decision-making, and robust supply chain management to outperform competitors during crises.

Institutions (Global Strategy)

The formal (laws, regulations, political systems) and informal (norms, culture, values, ethics) structures that guide individual and firm behavior, reducing uncertainty.

Formal Institutions

Explicit, codified rules and structures such as legal systems, political structures, and regulations that directly affect firm strategy, requiring assessment of risk and compliance.

Informal Institutions

Unwritten yet powerful influences like culture, norms, religious beliefs, and trust mechanisms that shape consumer behavior and business relationships.

Hofstede0s Cultural Dimensions

A framework for understanding national cultures based on five dimensions: Power Distance, Individualism vs. Collectivism, Uncertainty Avoidance, Masculinity vs. Femininity, and Long-Term vs. Short-Term Orientation.

Power Distance (Hofstede)

The extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally.

Individualism vs. Collectivism (Hofstede)

A cultural dimension describing the degree to which people prefer to act as individuals rather than as members of groups.

Uncertainty Avoidance (Hofstede)

A cultural dimension reflecting a society's tolerance for ambiguity and unstructured situations, and its preference for rules and clarity.

Masculinity vs. Femininity (Hofstede)

A cultural dimension focusing on the emphasis a society places on achievement, assertiveness, and material reward (masculinity) versus cooperation, modesty, and quality of life (femininity).

Long-Term vs. Short-Term Orientation (Hofstede)

A cultural dimension describing a society's focus on future rewards, perseverance, and thrift (long-term) versus present values, tradition, and fulfilling social obligations (short-term).

Guanxi

A system of personal and informal connections deeply rooted in Chinese culture that facilitates business, builds trust, and substitutes for weak legal enforcement.

Ethical Dilemma (International Business)

A situation where ethical standards vary across cultures and institutions, making it difficult for multinational firms to apply consistent ethical principles (e.g., local adaptation vs. global values).

Reactive (Ethical Response)

A strategic response to ethical challenges characterized by denial, avoidance of responsibility, and doing less than required.

Defensive (Ethical Response)

A strategic response to ethical challenges characterized by compliance only under pressure and admitting responsibility but doing the minimum.

Accommodative (Ethical Response)

A strategic response to ethical challenges characterized by accepting responsibility and doing more than the minimum ethical requirements.

Proactive (Ethical Response)

A strategic response to ethical challenges characterized by leading the industry in ethics and setting best practices.

Institutional Distance

The degree of difference between the institutional environments (formal and informal) of two countries, which can create friction and challenges for firms operating globally.

Cultural Intellectual Property

The economic value and ownership associated with cultural symbols, names, and traditions (e.g., Maasai name), which firms must ethically respect in branding.

Strategic Agility

The ability of a firm to respond quickly and effectively to changes in its internal and external environment, often linked to dynamic capabilities and crisis-readiness.

Strategy Tripod

A comprehensive framework integrating the Industry-Based View (external factors), Resource-Based View (internal resources), and Institution-Based View (formal and informal rules) to provide a holistic understanding of how firms formulate and execute strategy.

Industry-Based View

A strategic perspective emphasizing external forces such as market structure, competitive rivalry, entry barriers, and buyer/supplier power (Porter's Five Forces) to determine industry attractiveness and competitive positioning.

Resource-Based View

A strategic perspective stating firm success depends on internal capabilities and resources that are valuable, rare, inimitable, and organized (VRIO), which serve as the foundation for sustainable competitive advantage.

Institution-Based View

A strategic perspective recognizing that firms operate within formal (laws, regulations, political systems) and informal (culture, norms, ethics) institutional frameworks that profoundly shape strategic choices and constraints.

Semiglobalization

A concept asserting that despite increasing global interconnectedness, national differences in borders, legal systems, and cultural values persist as significant strategic forces. It highlights the need for firms to balance the pursuit of global scale and integration with local responsiveness and adaptation.

Intrapreneurship

The process where internal advocates within a firm champion strategic visions and innovations, often by combining persuasive storytelling, compelling data analysis, and deep cultural understanding to drive organizational change.

Globalization vs. Deglobalization

A core debate concerning whether global economic, political, and cultural integration is continuing, stagnating, or reversing, with significant implications for international business strategy.

Just-in-Time (JIT)

An inventory strategy emphasizing extreme efficiency by receiving goods only as they are needed, minimizing storage costs but making supply chains highly sensitive and potentially fragile in the face of uncertainty or disruptions.

Just-in-Case (JIC)

An inventory strategy emphasizing resilience and preparedness for uncertainty, often involving buffer stocks or redundant resources to mitigate the impact of supply chain disruptions or demand fluctuations.

Rivalry Among Competitors

One of Porter's Five Forces, describing intense competition that can lead to price wars, advertising battles, and innovation races. Firms must differentiate their offerings or dominate costs to thrive.

Threat of New Entrants

One of Porter's Five Forces, where low entry barriers invite disruptors into an industry, potentially eroding incumbents' profitability. Firms must build defenses like strong brands, proprietary technology, or patents to deter new players.

Bargaining Power of Suppliers

One of Porter's Five Forces, where few suppliers or specialized inputs give suppliers high power to squeeze firm margins through price increases or reduced quality. Firms can counter by diversifying suppliers or backward integrating.

Bargaining Power of Buyers

One of Porter's Five Forces, where informed buyers and low switching costs give buyers power to pressure firms for lower prices or higher quality. Firms can mitigate this through differentiation or creating high switching costs.

Threat of Substitutes

One of Porter's Five Forces, where alternatives from outside the industry (e.g., streaming services replacing DVDs) reduce a firm's pricing power and can eventually make an industry obsolete.

Strategic Group

A set of firms within the same industry that pursue similar strategies along dimensions like price, product line, or distribution channels, leading to the fiercest competition occurring within these groups.

Stuck in the Middle

Porter's theory that firms attempting to simultaneously pursue cost leadership and differentiation without clear operational excellence risk underperforming instead of achieving either effectively, lacking a distinct competitive advantage.

Industry-specific Performance Drivers

Factors shaping profitability based on the nature of the industry itself, such as industry structure (e.g., concentration, barriers to entry) and the intensity of competitive rivalry as described by Porter's Five Forces.

Firm-specific Performance Drivers

Factors influencing a firm's performance based on its unique internal resources, distinctive leadership, innovative capabilities, and strategic choices that differentiate it from competitors.

VRIO Framework

An acronym for Value, Rarity, Imitability, and Organization, providing a systematic tool to analyze a firm's internal resources and capabilities to determine if they are sources of sustained competitive advantage.

Value (VRIO)

A characteristic of a resource or capability that helps a firm exploit external opportunities or neutralize external threats, enabling it to perform effectively in its market.

Rarity (VRIO)

A characteristic of a resource or capability that few other firms currently possess, making it a potential source of competitive advantage since not many rivals can leverage it.

Imitability (VRIO)

A characteristic of a resource or capability that is difficult or costly for other firms to replicate, often due to factors like historical conditions, causal ambiguity, social complexity, or legal protection (e.g., patents).

Organization (VRIO)

A characteristic referring to whether a firm is structured, aligned, and managed effectively with appropriate systems, processes, and culture to fully utilize its valuable, rare, and inimitable resources and capabilities to capture their full potential.

Dynamic Capabilities

A firm0s higher-order ability to purposefully create, extend, or modify its resource base, enabling it to constantly adapt, integrate, and reconfigure internal and external resources in response to rapidly changing environments, crucial for achieving sustained strategic agility and survival in volatile industries.

Value Chain

A framework that breaks down a firm0s total activities into primary (e.g., inbound logistics, operations, marketing, service) and support (e.g., HR, technology development, procurement) functions to identify specific sources of differentiation or cost advantage.

Crisis-readiness

A core capability demonstrated by firms like H-E-B, involving advanced preparation, decentralized decision-making, robust and flexible supply chain management, and strong community ties to outperform competitors during crises and disruptions.

Institutions (Global Strategy)

The formal (laws, regulations, political systems, economic policies) and informal (norms, culture, values, ethics, trust) structures that guide individual and firm behavior, significantly reducing uncertainty and shaping strategic decision-making in international contexts.

Formal Institutions

Explicit, codified rules and structures such as legal systems, political structures, trade regulations, and economic policies that directly affect firm strategy, requiring careful assessment of political risk and compliance.

Informal Institutions

Unwritten yet powerful influences like culture, norms, religious beliefs, ethical values, and trust mechanisms that shape consumer behavior, business relationships, and communication styles in a given society.

Hofstede0s Cultural Dimensions

A widely used framework for understanding national cultures based on five dimensions: Power Distance, Individualism vs. Collectivism, Uncertainty Avoidance, Masculinity vs. Femininity, and Long-Term vs. Short-Term Orientation, providing insights into cross-cultural differences.

Power Distance (Hofstede)

The extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally. High power distance cultures show deference to authority, while low power distance cultures prefer more egalitarian structures.

Individualism vs. Collectivism (Hofstede)

A cultural dimension describing the degree to which people prefer to act as individuals (individualism) rather than primarily as members of tightly-knit groups or extended families (collectivism).

Uncertainty Avoidance (Hofstede)

A cultural dimension reflecting a society's tolerance for ambiguity and unstructured situations, and its preference for rules, clarity, and predictability. High uncertainty avoidance cultures tend to be more rigid and resistant to change.

Masculinity vs. Femininity (Hofstede)

A cultural dimension focusing on the emphasis a society places on achievement, assertiveness, and material reward (masculinity) versus cooperation, modesty, caring for the weak, and quality of life (femininity).

Long-Term vs. Short-Term Orientation (Hofstede)

A cultural dimension describing a society's focus on future rewards, perseverance, thrift, and saving (long-term orientation) versus adherence to tradition, fulfilling social obligations, and protecting one's 'face' (short-term orientation).

Guanxi

A system of personal and informal connections deeply rooted in Chinese culture that facilitates business, builds trust, and can act as a substitute for weak formal legal enforcement by leveraging mutual obligations and favors.

Ethical Dilemma (International Business)

A situation where ethical standards vary significantly across cultures and institutions, making it difficult for multinational firms to apply consistent ethical principles (e.g., balancing global corporate values with local cultural practices).

Reactive (Ethical Response)

A strategic response to ethical challenges characterized by denial of responsibility, avoidance of confrontation, and doing less than ethically required by waiting until legal or public pressure forces action.

Defensive (Ethical Response)

A strategic response to ethical challenges characterized by admitting responsibility but doing the bare minimum required by law or public opinion, often under significant pressure, and reluctantly complying.

Accommodative (Ethical Response)

A strategic response to ethical challenges characterized by accepting responsibility for ethical issues and doing more than the minimum legal or public relations requirements, often through proactive measures and stakeholder engagement.

Proactive (Ethical Response)

A strategic response to ethical challenges characterized by anticipating ethical responsibilities, leading the industry in setting best practices, and actively striving to do good and prevent harm for all stakeholders.

Institutional Distance

The degree of difference between the institutional environments (formal and informal) of two countries, which can create significant friction, challenges, and increased transaction costs for firms operating globally, impacting entry modes and strategic choices.

Cultural Intellectual Property

The economic value and ownership associated with cultural symbols, names, motifs, and traditions (e.g., Maasai name, indigenous designs), which firms must ethically respect in branding and product development to avoid cultural appropriation.

Strategic Agility

The ability of a firm to respond quickly and effectively to changes in its internal and external environment by reallocating resources, adapting strategies, and seizing new opportunities, often closely linked to strong dynamic capabilities and crisis-readiness.