EXAM PREP

Cost Leadership

A strategy aimed at becoming the lowest-cost producer in the industry.

Differentiation Strategy

A strategy to offer unique products or services that provide value to customers, allowing for premium pricing.

Niche Market

A focused, targetable portion of a market segment, distinct from the broader industry.

Stakeholder

Any person or group that has an interest in an organization's success and is affected by it.

Pyramid of Corporate Responsibility

A framework describing a company's responsibility across economic, legal, ethical, and philanthropic dimensions.

Flywheel Effect

The concept that small, consistent efforts build momentum over time, leading to significant success.

Vision Statement

A declaration of an organization’s objectives, intended to guide its internal decision-making.

Emergent Strategy

A bottom-up approach to strategy formation, utilizing insights from employees and market feedback.

Black Swan Event

A rare and unpredictable event that has significant consequences, typically unforeseen.

PESTEL Framework

A strategic tool to analyze external factors (Political, Economic, Sociocultural, Technological, Environmental, Legal) affecting an organization.

Porter's Five Forces

A framework for understanding the competitive forces within an industry that determine its profitability.

Economic Moat

A company's ability to maintain a competitive advantage over its rivals, protecting long-term profits.

VRIO Framework

A tool for evaluating a firm's resources and capabilities to determine if they can provide a sustainable competitive advantage.

Dynamic Capabilities

The firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.

Public Stock Company

A corporate structure where ownership is divided into shares that can be traded publicly.

Stakeholder Capitalism

An economic system in which corporations are oriented to serve the interests of all their stakeholders.

Economic Value Creation

The different between what customers are willing to pay for a product (WTP) and the cost to produce it.

Triple Bottom Line

A sustainability framework that examines a company's commitment to social, environmental, and economic performance.

Threat of New Entrants

The risk of new competitors entering the industry, affecting market share and profitability.

Bargaining Power of Suppliers

The ability of suppliers to influence the price and quality of materials or services.

Bargaining Power of Buyers

The capability of customers to affect pricing and demand terms in the market.

Threat of Substitute Products or Services

The likelihood that customers may find alternative products or services that fulfill the same need.

Industry Rivalry

The intensity of competition among existing firms in the industry, influencing pricing and profitability.

Attractive Qualities of Public Companies

1. Access to Capital: Ability to raise funds through public investment. 2. Enhanced Visibility: Increased public profile attracts customers and partners. 3. Liquidity: Shares can be easily bought and sold, providing liquidity for investors. 4. Employee Incentives: Opportunities for stock options and employee ownership boost morale and

Benefits of Stakeholder Capitalism

Promotes long-term sustainability, enhances brand loyalty, and improves employee morale by addressing the interests of all stakeholders.

Criticism of Shareholder Capitalism

Often seen as shortsighted, prioritizing short-term profits over long-term sustainability and social responsibility.