Chapter 1: Strategic Management Overview - Vocabulary Flashcards

A set of vocabulary flashcards covering key concepts from Chapter 1 notes on strategic management, including definitions of strategy, competitive advantage, RBV vs IO, and related concepts.

Strategic management

The ongoing process of analyzing the external and internal environments, formulating strategy, and implementing it to exploit core competencies and gain competitive advantage.

Strategy

An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage; includes both planning and execution.

Strategy formulation

The process of developing the plan—deciding what to accomplish and how to allocate resources.

Strategy implementation

Carrying out the strategy by mobilizing resources and taking actions to realize the plan.

Core competencies

Unique capabilities that create value for customers and are difficult for competitors to imitate, forming the basis for competitive advantage.

Competitive advantage

The outcome of leveraging core competencies to achieve above-average returns relative to rivals; durable when not easily copied.

Ambidexterity

The ability to exploit existing core competencies while simultaneously exploring new opportunities; balancing exploitation and exploration.

External environment

Forces outside the firm that influence performance, including globalization, competition, regulation, and industry structure.

Internal environment

The firm’s own resources, capabilities, and core competencies that influence performance.

IO model

Industrial Organization perspective: external environment and industry characteristics largely determine firm performance and profitability.

RBV

Resource-Based View: internal resources and capabilities drive performance; competitive advantage arises from valuable, rare, inimitable, and non-substitutable resources/capabilities.

VRIN

Value, Rare, Inimitable, Non-substitutable; a framework (also called VREN in notes) for assessing resources' potential to sustain advantage.

Resources

Inputs used to produce goods/services; tangible resources are physical assets, intangible resources include brands, IP, and know-how.

Capabilities

The capacity to deploy and utilize resources effectively; often embedded in processes and routines.

Vision

A concise, aspirational statement of the desired future; broad and inspirational, guiding decisions across the organization.

Mission

A more concrete statement describing what the organization does, for whom, and how; defines the business and approach.

Values

Core beliefs that guide behavior and culture within the organization.

Stakeholders

Individuals or groups affected by or affecting the organization; internal (employees) and external (partners, communities, governments); primary vs secondary and power/urgency/legitimacy influence responses.

Strategic leaders

Individuals at the top levels (and others with leadership roles) who guide the organization toward its vision and mission.

Organizational culture

The shared norms, beliefs, symbols, and energy that shape daily operations; a valuable, hard-to-imitate intangible resource.

Hyper-competition

An environment of intensified, rapidly changing competition with low entry barriers and fast market shifts driven by technology and globalization.

Globalization

The increasing interdependence across borders, reducing the relevance of geographic boundaries and enabling cross-border trade and integration.

Liability of foreignness

Disadvantages outsiders face in foreign markets due to lack of local knowledge, networks, and regulatory familiarity.

Disruptive technologies

Technologies that destroy the value of existing products and create new markets (e.g., cars replacing horse-drawn carriages, smartphones replacing multiple devices).

Big data analytics

The collection and analysis of large data sets to extract meaningful patterns and actionable insights that guide decision-making.