Business Strategy - Competitive Advantage and Innovation

This set of flashcards covers key vocabulary and concepts related to business strategy, competitive advantage, and innovation from the lecture notes.

Economic Value Creation

The process of estimating the economic value generated by all products and services offered by a firm.

Business Level Strategy

Goal-directed actions taken by a company to achieve competitive advantage within a single industry or market.

Strategic Trade-Offs

Decisions between a cost or value position that managers must address to maximize economic value creation and profit margin.

Generic Business Strategies

Strategies applicable by any organization focused on sources of competitive advantage through differentiation or cost leadership.

Differentiation Strategy

A strategy focused on creating higher value than competitors by offering unique features in products or services.

Cost Leadership Strategy

A strategy aimed at delivering similar value to competitors while keeping costs lower to charge reduced prices.

Value Drivers

Factors such as product features, quality, reliability, and brand image that increase perceived value to customers.

Economies of Scale

The cost advantages a firm experiences as its output increases, thereby lowering the per-unit cost.

Learning Curve Effects

Cost reductions achieved through increased efficiency as production experience accumulates over time.

Experience Curve Effects

Cost reductions that result from both learning effects and improvements in technology or production processes.

Blue Ocean Strategy

A strategy that seeks to create new market spaces (blue oceans) by combining differentiation and cost leadership.

Value Innovation

The successful creation of new consumer benefits by eliminating or reducing factors that the industry takes for granted.

Incremental Innovation

Improvements made on established knowledge, targeting existing markets and existing technologies.

Radical Innovation

The creation of entirely new knowledge or technologies, targeting new markets and setting new paradigms.

Disruptive Innovation

Innovations that leverage new technologies to disrupt existing markets and business models.

Strategic Entrepreneurship

Online of innovation driven by a strategy to create new opportunities while exploiting existing ones.

Social Entrepreneurship

The pursuit of social goals alongside profitable business objectives, balancing financial and ecological contributions.

Competitive Advantage

A firm's ability to outperform its competitors by creating more economic value.

First-Mover Advantage

The competitive advantage gained by being the first to enter a market or develop a new product.