S&O Terms - W3

what is a company’s mission

defines the company’s core purpose, business domain, & customer needs it aism to satisy → current

what is the company’s vision?

describes the company’s long-term aspirations and the legacy it wants to create → future dreams

what are a company’s values?

the core principals and ideals that guide a company’s behavior and decision-making → authenticity, clarity, durability

what is a company’s purpose?

describes a company’s fundamental reason for existence, focusing on its societal & environmental contributions beyond profit-making → the “why” behind a company’s actions

what is corporate social responsibilit (CSR)?

rooted in moral philosophy, it argues that companies have a moral duty to improve the well-being of all stakeholders → focusing on addressing environmental,social, and governance issues (ESG)

what is corporate purpose?

goal is to achieve a balance between economic success and social goals, often tied to specific sustainable development goals

what is strong stakeholder reciprocation?

when stakeholders see a company acting responsibly, they respond with increased trust & commitment

what is an example of direct risk reduction?

preventing harm (ex. avoiding oil spills, ensuring worker safety) → reduces financial & reputational damage

what is an example of indirect risk reduction?

building stronger stakeholder relationships helps identify threats → ex. scandal occured because employees feared sharing bad news

what are the 3 different approaches that companies take to balance economic & environmental/social (E&S) goals?

• dual mode approach (separate goals)

• partial convergence approach (some overlap)

• full convergence (aligned goals)

what is the dual mode approach?

• economic & E&S goals are pursued separately

• venn diagram as 2 separate circles

• core activities focus on profit, peripheral activities handle social goals

what is the partial convergence

• some overlap in the middle of the venn diagram

• some core activities pursue both economic & E&S goals simultaneously, while others remain separate

what is full convergence

• aligned goals → full overlap of 2 circles

• all activities integrate both economic and E&S goals, making them mutually reinforcing

what is a reactive divergent company + example?

• motivation = external

• goals = divergence (separation of economic & social goals)

• example → Shell

what is a proactive divergent type company + example?

• motivation = internal

• goals = separation between economic & social goals

• example → NXP semiconductors

what is a proactive convergent type company + example?

• motivation = internal

• convergence of economic & social goals

• example → Philips

what is a reactive convergent type company + example?

• motivation = external

• convergence of economic & social goals

• example → CVS pharmacy (Selling tobacco products)

what are the two types of purpose journeys companies can take to become the ideal proactive convergent type company?

inside-out journey & outside-in journey

what is the inside-out journey towards proactive convergence?

starts with an internal push to integrate social goals into the company’s core purpose & operations

what is the outside-in journey towards proactive convergence?

triggered by externl pressures from stakeholders, forcing the company to adjust its business model

what are strategic objectives?

specific, measurable (SMART) goals that operationalize a company’s mission, vision, values, and purpose → can be both financial and non-financial

what are resources?

the productive assets that a firm controls and utilizes to formulate & implement its strategies → tangible & intangible

what is the knowledge-based view of the firm?

company is a unique entity for creating and applying knowledge, which accumulates over time, is difficult for competitors to imitate, and is a driver of competitive advantage

what is technical knowledge of a firm?

specific skills & expertise related to tasks, technologies, and processes.

what is a firm’s contextual knowledge?

a broader understanding of th ecompetitive environment, customer preferences, and market dynamics

what is intertia in a firm?

a tendancy to keep things the way they were or resist change

what is porter’s value chain & what is its purpose?

provides a useful frameowkr for analyzing operational capabilities → primary & secondary activities

what are core rigidities?

occur when a company becomes so over-reliant on its successful core competencies that they become obstacles to change, blinding the firm to new technologies or market shifts

what is the framework used to evaluate competencies to see if they are a source of competetivie advantage (core competencies)?

VRINO framework

what does VRINO stand for?

• Valuable

• Rare

• Inimitable

• Non-substitutable

• Organized

what are porter’s generic competitive strategies?

• differentiation

• cost leadership

• differentiation focus

• cost focus

what is strategic positioning?

it is what shapes a firm’s generic strategy

what are the 3 sources of strategic positioning?

1. variety-based positioning

2. needs-based positioning

3. access-based positioning

what is variety-based positioning?

firm specializes in a particular product variety and serves a wide range of customers, but only for that specific need

what is needs-based positioning?

this approach segments customers based on their differing needs & develops a tailored set of activities to meet those needs

what is access-based positioning?

the positioning is based on segmenting customers who, despite having similar needs, are best reached in different ways → ex. urban vs. rural customers

what is a pipeline business?

operstes on a linear value chain, controls a series of activities to transform inputs into finishe product, which is pushed out to the customer

what 2 factors shape a platform’s identity?

its architecture (ex. open vs. closed) and its scope (ex. niche vs. generalist)

how can a new entrant compete on a new platform?

• revolutionary functionality - a massive leap in value

• platform envelopment - where it enters another platform’s market by bundling its own functionality with the incumbent’s

what are the 3 levels of competition for platform owners to manage?

• platform vs. platform

• platform vs. its own complementor

• complementor vs. complementor

what is industry clockspeed?

refers to the rate of change within an industry, driven by technological and competitive developments

what is a slow-clockspeed industry + example?

competitive advantages can be sustained for longer, & strategic persistance is often rewarded → ex. commercial aircraft manufacturing

what is a fast-clockspeed industry + example?

competitive advantages are fleeting, and firms must demonstrate strategic flexibility, frequently reconsidering and altering their strategies to survive and succeed → ex. consumer electronics (phones)

what are the 5 ways of responding to disruptive innovation?

1. focus on the existing strategy

2. ignore the innovation

3. attack back

4. adopt & co-exist

5. embrace & scale up to the new strategy

why do we have firms?

because firms reduce transactions & transaction costs

what are the primary activities involved in porter’s generic value chain?

1. inbound logistics → receiving, storing, & managing raw materials

2. operations → production, packaging, assembly

3. outbound logistics → warehousing, transportation

4. marketing & sales → selling to customer

5. sevice → repair, customer service

what are the support activities in porter’s generic value chain?

1. firm infrastructure → management team & other departments

2. human resource management → recruiting workers & taking care of them

3. technology development → design, automation, R&D

4. procurement → activities related to the purchasing of inputs

what is the central source of competitive advantage for any platform organization?

network size

how can platforms grow the network?

• entering new markets → revolutionary functionality or platform envelopment

• invest in maximizing ecosystem value → imrpoving user experience & managing competition