Studied by 0 people
Looks like no one added any tags here yet for you.
What is the relationship between a firm’s customers and its business-level strategy?
Firms must consider who their customers are (the groups), what their needs are, and how they can leverage core competencies to meet those needs. This relationship is crucial for tailoring strategies to create value and gain a competitive advantage.
What is a business model?
A business model describes how a firm creates, delivers, and captures value for its stakeholders. It relates to business-level strategies by outlining the framework through which those strategies are implemented and how value is generated.
How do cost leadership and differentiation strategies position firms against competition?
Cost leadership allows firms to offer lower prices than competitors, creating a barrier to entry, while differentiation enables firms to command premium prices due to unique features, thereby mitigating competitive pressure.
What are the differences among the five business-level strategies?
Cost leadership focuses on low-cost production; differentiation emphasizes unique features; focused cost leadership targets specific customer segments with low prices; focused differentiation serves niche markets with unique offerings; integrated strategy combines low-cost and differentiated features.
What is the definition of competitors in a market context?
Competitors are companies that operate within the same market, offering similar products or services and competing for the same customer base.
How are competitive rivalry, competitive behavior, and competitive dynamics described?
Competitive rivalry involves the ongoing actions and interactions between firms as they compete for market share, while competitive behavior includes the specific measures taken in response to rivals, and competitive dynamics refer to the broader patterns of these interactions.
What is meant by market commonality and resource similarity, and how do they relate to competitor analysis?
Market commonality refers to the overlap in markets that competing firms operate in, whereas resource similarity indicates how alike their resources are, both serving as foundational elements for analyzing competition.
In what ways does awareness, motivation, and ability influence a firm's competitive actions?
Awareness entails how well firms recognize their competitors' moves; motivation reflects their willingness to react, and ability relates to their resources and capacity to implement a response.
What factors determine the likelihood that a firm will take competitive actions?
Factors include the conditions of the market, opportunities perceived, resource strengths, and the strategies of rival firms.
How do competitive dynamics differ across slow-cycle, fast-cycle, and standard-cycle markets?
Slow-cycle markets allow longer maintenance of competitive advantages, fast-cycle markets see rapid changes and imitation among firms, and standard-cycle markets present moderate competition with room for innovation and adjustment.
Define corporate-level strategy and its significance.
Corporate-level strategy encompasses the overall plan for how a company will create value by managing its diverse business units and markets, playing a vital role in gaining a competitive edge.
What diversification options do firms have through corporate-level strategies?
Firms can engage in single-business diversification, related diversification, or unrelated diversification.
What are three motivations behind a firm's decision to diversify its operations?
Achieving economies of scale, 2) Spreading risk across various markets, 3) Enhancing market power through synergies.
In what ways do firms generate value through a related diversification strategy?
They create value by sharing resources and capabilities among business units, exploiting synergies, and improving operational efficiency.
How can firms achieve financial economies with an unrelated diversification strategy?
By efficiently allocating capital across various sectors and pooling cash flow to optimize investment opportunities.
What are some incentives that encourage firms to diversify?
Firms are incentivized to diversify for growth opportunities, risk reduction through portfolio diversification, and increased market power.
competitive behavior
Competitive behavior involves the specific measures taken by firms in response to their rivals.
competitive dynamics
Competitive dynamics refer to the ongoing actions and interactions between firms as they compete for market share.
competitive response
A competitive response is an action taken by a firm in reaction to a competitor's move.
competitors
Competitors are companies that operate within the same market, offering similar products or services and competing for the same customer base.
fast-cycle markets
Fast-cycle markets are markets where competitive advantages are temporary and subject to rapid imitation.
first mover
A first mover is a firm that is the first to enter a new market or industry with a specific product or service.
late mover
A late mover is a firm that enters a market after the first movers and often observes and learns from the experiences of early entrants.
multipoint competition
Multipoint competition occurs when firms compete against each other in multiple market segments.
non-market strategies
Non-market strategies involve actions taken by firms that are not directly related to market competition, such as lobbying or public relations.
quality
Quality refers to the standard of the products or services that a firm offers, which can influence customer satisfaction and competitiveness.
resource similarity
Resource similarity indicates how alike the resources of competing firms are.
second mover
A second mover is a firm that follows in the footsteps of the first mover, often improving upon the initial offering.
slow-cycle markets
Slow-cycle markets are markets where firms can maintain competitive advantages for longer periods.
standard-cycle markets
Standard-cycle markets present moderate competition with room for innovation and adjustment.
strategic action or strategic response
Strategic actions or responses require significant resource commitment and are difficult to implement or reverse.
tactical action or tactical response
Tactical actions or responses require fewer resources and are easier to implement or reverse.
Digital Platform
An online framework designed to facilitate value exchanges and interactions among various users, including consumers and producers.
Digital Strategy
The strategic use of digital tools and platforms to achieve business objectives, improve customer engagement, and optimize operations.
Market Segmentation
The process of categorizing a broad market into smaller, more defined groups based on shared characteristics.
Total Quality Management (TQM)
An organization-wide philosophy emphasizing continuous improvement, customer satisfaction, and active employee participation in enhancing quality.
Corporate-level core competencies
Unique strengths and capabilities that a company has at the corporate level, enabling it to achieve competitive advantage across different business units.
Corporate relatedness
The practice of sharing resources and activities among different business units within a firm to gain operational advantages.
Economies of scope
Cost savings that occur when a firm provides a range of products or services instead of specializing in just one.
Financial economies
Savings that come from efficiently allocating capital across various business units, typically attained through diversification.
Market power
The capacity of a firm to affect the pricing and output of its products or services within the marketplace, often based on its size or market presence.
Operational relatedness
The degree to which different businesses within a corporation share operational processes and resources, enhancing overall efficiency.
Synergy
The idea that the combined performance and value of multiple companies will exceed the total value and performance if they operate individually.
Vertical integration
A strategy in which a company expands its operations by acquiring or merging with other businesses at various stages of the production and supply chain.
Blue Ocean Strategy
the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand
Red Ocean Strategy
when companies try to outperform their rivals to grab a greater share of existing demand
1900-1941 Globalization Wave
Sales, operation and some procurement
Strategy flowed from HQ to international sites
1945-2000 Globalization Wave
Greater local responsiveness
European focused due to WW2
21st Century Globalization Wave
Zoom calls
Remote working positionsand increased reliance on digital communication technologies.
CAGE Distance Framework
A decision framework that guides MNEs that are entering new countries based on inter-countries relative distance
What does CAGE stand for?
Cultural, Administrative, Geographic, and Economic distance
Porter’s Diamond of National Competitive Advantage
Focuses on 4 Conditions: Factor Conditions, Demand Conditions, Related and Supporting Industries, Competitve Intensity in Focal Industry
Due Deligence
A process of investigation and evaluation that MNEs undertake before making significant business decisions, particularly in mergers and acquisitions, to assess risks and opportunities.
Multinational Enterprises (MNEs)
Organizations that operate in multiple countries, managing operations across various markets to enhance competitiveness and leverage global opportunities.
Hubris
A cognitive bias where a leader overestimates their own competencies and decision-making abilities, often leading to risky business choices.
Advantages for Globalizing
Firms often gain access to new markets, resources, and economies of scale, enhancing overall competitiveness and profitability.
Disadvantages for Globalizing
Firms may face increased competition, cultural differences, and operational complexities, which can lead to higher costs and risks.
Foreign Direct Investment
Investment made by a company or individual in one country in business interests in another country, typically involving significant control over the foreign business operations.
Cost Reductions
Achieving lower operational costs through economies of scale, outsourcing, or efficient resource management.
Local Responsiveness
The need to tailor product and serivce offerings to fit local consumer preferences
Global Standardization
The process of developing uniform products and services that can be marketed globally, maximizing efficiency and minimizing costs.
Transnational Strategy
strategy that combines global efficiency with local responsiveness, allowing firms to operate in multiple countries while adapting to local markets.
International Strategy
A strategy that focuses on exporting products and services to foreign markets while maintaining a centralized approach to operations and decision-making.
Multidomestic Strategy
strategy that prioritizes local responsiveness by tailoring products and services to fit the specific needs and preferences of each country or market.
