Midterm 1 Review: Causation, Effectuation, Value Disciplines, and Blue Ocean Strategy

Flashcards covering causation vs. effectuation, the five effectuation principles, Treacy & Wiersema's value disciplines, and blue ocean strategy based on lecture notes.

Causation (Causal Logic)

A goal-oriented management logic that starts with a fixed goal, relies on market research and prediction, and fits stable, predictable environments where market data is available.

Effectuation

A disciplined entrepreneurial logic that starts with available resources, creates new ends and opportunities through partnerships as it goes, and operates under high uncertainty without predictive data.

Bird in Hand Principle

An effectuation principle focused on starting with who you are, what you know, and who you know, rather than waiting for missing resources.

Affordable Loss Principle

An effectuation principle that advises committing only what you can afford to lose, such as money or time.

Crazy Quilt Principle

An effectuation principle centered on bringing people together to figure things out by combining time, expertise, and knowledge.

Lemonade Principle

An effectuation principle of treating unexpected surprises as creative opportunities, turning setbacks (lemons) into something useful (lemonade).

Pilot-in-Plane Principle

An effectuation principle focused on taking actions within your control, rather than attempting to predict the future.

Value Disciplines Framework

A strategic business framework based on the concept that a company cannot be everything to everyone; to succeed, a business must lead in one discipline, be good enough in the other two, and never attempt to chase all three.

Operational Excellence

A value discipline focused on delivering reliable products or services at the lowest cost with maximum convenience and delivery efficiency (e.g., Walmart, IKEA, McDonald's).

Product Leadership

A value discipline centered on offering the most cutting-edge, high-performing products on the market through creativity and risk-taking (e.g., Apple, Tesla, Nike).

Customer Intimacy

A value discipline centered on providing tailored solutions, building deep relationships, offering personal service, and fostering customer loyalty (e.g., Nordstrom).

Blue Ocean Strategy

A strategy centered on making the competition irrelevant by creating a new market space, rather than battling rivals for share in a crowded Red market.