MGMT Capstone Midterm

Ability to analyze, understand, and manage an internal organization in ways that are not dependent on assumptions of a single country, culture, or context.

Possess at least some resources and capabilities other firms do not.

Measured by a products' performance characteristics and by its attributes customers are willing to pay. 

Bundle and Leverage resources and capabilities

Source of above-average returns

Regarding characteristics of the general and industry environments, competitors actions, and customer preferences

Regarding the related causes shaping a firm's environments and perceptions of the environments

Conflict among people making managerial decisions and those affected by them

• Uncertainty
• Complexity
• Intraorganizational conflicts

Capability of making successful decisions when no obvious correct model or rule is available or when relevant data is unreliable

Assets that can be observed and quantified

• Production Equipment
• Distribution Centers
• Manufacturing Facilities

• Financial Resources
• Organizational Resources
• Physical Resources
• Technological Resources

• Firm's borrowing Capacity
• Ability to generate funds

• Firm's formal reporting structure
• Formal planning, controlling, and coordinating systems

• Location of a firm's plant and equipment
• Access to raw materials

Stock of Technology

• Patents
• Copyrights
• Trade secrets

• MOST CRITICAL
• CAN BE LEVERAGED

Assets that are roots deeply in the firm's history - difficult for competitors to analyze and imitate

• Superior source of core competencies
• More unobservable = greater competitive advantage

• Human Resources
• Innovation Resources
• Reputational Resources

• Knowledge
• Trust
• Organizational routines

• Ideas
• Scientific Capabilities
• Capacity to Innovate

• Brand name
• Reputation w/ customers and suppliers
• Perception of product quality and reliability

Based on developing, carrying, and exchanging info and knowledge through firm's human capital

• Marketing
• Distribution
• HR
• Management

• Capabilities that serve as a sources of competitive advantage for firms over rivals
• Activities a firm performs especially well compared w/ competitors

• Value Capabilities
• Rare Capabilities
• Costly to Imitate Capabilities
• Non-substitutable Capabilities

Help a firm neutralize threats or exploit opportunities

Not possessed by many others

Historical: Unique organizational culture or brand name

Ambiguous: Causes/use of a competency is unclear

Social Complexity: Interpersonal relationships, trust, friendship among managers, suppliers, and customers

NOT EASILY DEVELOPED

Do not have strategic equivalents

Allows firm to understand the parts of operation that create value

Involved w/ products' physical creation, sale and distribution, and service after sale

• 1. Inbound logistics (warehousing, inventory control)
• 2. Operations
• 3. Marketing/Sales
• 4. Service
• 5. Outbound Logistics (collecting, storing, distributing)

• Dealing w/ Final Product: Collecting, Storing, and Distributing
• Finished Goods Warehousing

• Material Handling
• Warehousing
• Inventory Control

Provide the assistance necessary for primary activities to take place

• Technological development
• HR management (hiring, recruiting)
• Firm infrastructure
• Procurement

Positions the business to meet or exceed the needs/desires of its targeted audience better than competition via a unique set of integrated activities set.

• Superior customer/consumer value
• Sustainable competitive advantage

Strategy that the firm forms to describe how it intends to compete in a product market

• Reach
• Richness
• Loyalty

• Access and connection to customer
• Goal is to extend reach

• Depth and detail of the flow of information between firm and customer
• Example: Airlines communicating via text about flight info

• Facilitating useful interactions w/ customers
• Viewing world through customer's eyes
• Customers' interests

• Who= Determining customers to serve
• Process used to cluster people w/ similar needs into individual and identifiable groups

• Demographic factors (age, sex, income)
• Socioeconomic factors (social class)
• Geographical factors (cultural, regional)
• Psycological factors (lifestyle, personality traits)
• Consumption patterns
• Perceptual patterns

• End use segments
• Product segments
• Geographic segments
• Common buying factor segments
• Customer size segment

Identifying the targeted customer groups' needs that its goods/services can satisfy

Use core competencies to implement value creating strategies and thereby satisfy customer needs

• Create differences between the firm's position and those of its competitors
•      Perform differently or different activities

• Lower costs than rivals
• Ability to differentiate and demand a premium price

• 1) Cost leadership
• 2) Differentiation
• 3) Focused cost leadership
• 4) Focused differentiation
• 5) Integrated cost leadership/differentiation

• Integrated set of actions taken to produce goods/services with features that are acceptable to customers at the lowest cost - relative to competition
• Standardized goods/services
• Broad target, cost
• Examine primary & support activities to lower costs
• Example: Big lots, Greyhound, Walmart, and Kia are all brand names, low prices

• 1) Distribution processes may become obsolete
• 2) Too much focus on cost reductions
• 3) Imitation

• Differentiating yourself from others in the market (innovates)
• Different: products, features/benefits, superior value permits premium price
• Broad target, uniqueness (non-standardized)
• Examples: Lexus, Ralph Lauren, John Deere

• 1) Price differential between competitor too large
• 2) Cease to provide value customers are willing to pay
• 3) Positive experiences w/ competitors
• 4) Counterfeits

• Integrated set of actions to serve the needs of an industry segment or niche
• 1) Particular buyer group (youth, teens, etc.)
• 2) Different product cone segment
• 3) Different geographic market

• Example: IKEA
• Cost leader and differentiated products to target market

• Example: Denver Based Kazoo Toys
• Access to unique service and creating value

• 1) Focus on a more narrowly defined segment
• 2) Focused markets are attractive
• 3) Needs of focused segment can become similar to industry wide needs

• Engaging in primary and support activities that allow a firm to simultaneously pursue low cost and differentiation
• Efficiently produce products w/ differentiated features
• Example: Target ("Expect more, pay less"), Zara

• 1) Difficult to produce differentiated, inexpensive goods
• 2) Fail to perform primary and support activities
• 3) May get stuck in the middle of strategies

• Computer controlled process
• Used to produce a variety of products in moderate, flexible quantities wit ha minimum of manual intervention
• Eliminate "low cost vs. product variety" trade off

• Link companies w/ suppliers, distributors, and customers
• Provide flexibility

• Developed with the goal of:
• 1)Increase customer satisfaction
• 2) Cut costs
• 3) Reduce time required to introduce innovative products to market

All competitive behavior, total set of actions & responses taken by all firms competing within a market

• 1) Competitors (engage in...)
• 2) Competitive rivalry (through...)
• 3) Competitive behavior
• 4) Results in competitive dynamics

Firms operating in the same market, offering similar products, and targeting similar customers

• Ongoing set of competitive actions and responses that occur among firms as they maneuver for an advantageous market spot
• Influences firms ability to gain & sustain competitive advantages

Use to try to successfully position itself relative to the "five forces" and defend and build competitive advantages

Firms compete against each other in service product or geographic markets

• 1) Market Commonality
• 2) Resource Similarity

• Related in terms of technologies or core competencies needed to develop a competitive advantage
• Concerned with number of markets with which the firm and competitor are jointly involved and degree of importance the individual markets to each

• Extent to which a firm's tangible and intangible resources are comparable to a competitor's both in type and amount
• Example: FedEx and UPS

• 1) Awareness
• 2) Motivation
• 3) Ability

• Prerequisite to any competitive action
• Extent to which competitors recognize the degree of their mutual interdependence that results from:
• 1) Market Commonality
• 2) Resource Similarity (Greatest when high)

Firm's incentive to take action or respond to a competitor's attack (related to perceived gains or losses)

Availability of resources and flexibility they have

Strategical or tactical action the firm takes to build or defend its competitive advantages or improve market position

A strategic or tactical action the firm takes to counter the effects of a competitor's competitive action

• Market-Based move that involves a significant commitment of organizational resources
• Difficult to implement and reverse

• Market based move that is taken to fine-tune a strategy
• Involves fewer resources, easy to implement and reverse