1. Strategic management
    process by which an organization manages the formulation & implementation of its overall strategy
  2. Strategy
    overarching means by which an organization seeks to achieve its goals & objectives
  3. Business strategy
    ways a firm goes about achieving its objectives w/in a particular industry or industry segment
  4. Corporate strategy
    strategy for guiding a firm's entry & exit from different businesses, for determining how a parent company adds value to & manages its portfolio of bussiness, & for creating value through diversification
  5. Strategy formulation
    process of deciding what to do
  6. Strategy implementation
    process of performing all the activities necessary to do what has been planned
  7. Arenas
    area (product, service, distribution channels, geographic markets, technology, etc) in which a firm participates
  8. Differentiators
    features & attributes of a company's products/services (image, customization, technical superiority, price, quality, & reliability) that help it beat its competitors in the marketplace
  9. Staging
    timing & pace of strategic moves
  10. Economic logic
    how the firm will earn a profit; how the firm will generate positive returns over & above its cost of capital
  11. Competitive advantage
    firm's ability to create value in a way that its rivals cannot
  12. Sustained Competitive Advantage
    exists to the extent that firm can earn higher profits than competitors over long period of time
  13. Leadership
    task of exerting influence on other people's pursuit of goals in an organizational context
  14. Strategic leadership
    managing an overall enterprise & influencing key organizational outcomes, such as companywide performance, competitive superiority, innovation, strategic change, & survival.
  15. Figurehead
    performs ceremonial activities that have symbolic benefits
  16. Liaison
    maintains relationships w/key external stakeholders, thus strengthening the company's link w/its external environment
  17. Monitor
    collects/filters of information about the firm & its competitive environment
  18. Disseminator
    communications understandings to internal constituents (employees)
  19. Spokesperson
    communicates understandings to external stakeholders
  20. Entrepreneur
    designs overall firm strategy
  21. Disturbance handler
    handles unanticipated strategic issues
  22. Negotiator
    executes non-routine transactions involving other organizations
  23. Social network
    collection of ties between people & the strength of those ties
  24. Social capital
    advantage created by a person's location in a structure of relationships
  25. Succession planning
    typically overseen by the board, often w/an outside consulting firm & usually involve the current CEO
  26. Vision
    simple statement of where the firm is going, & what the firm's leaders want it to be in the future
  27. Mission
    Declaration of what the firm stands for in relation to key organizational stakeholders like employees, customers, investors, government, & the environment
  28. Goals
    combination of a broad indication of organizational intentions
  29. Objectives
    specific, measurable steps
  30. Return on invested capital (ROIC)
    how effectively a company uses the money (borrowed or owned) invested in its operations
  31. Superordinate goals
    overarching reference point for other goals & objectives
  32. Balanced scorecard
    managers track their strategic process against goals & objective with this tool; it's a system for bridging vision & strategy
  33. Strategic purpose
    simplified, widely shared model of the organization & its future, including anticipated changes in its environment
  34. Strategic coherence
    symmetrical co-alignment of the 5 elements of a firm's strategy
  35. Stakeholders
    individuals or groups who have an interest in an organization's ability to deliver intended results & maintain the viability of its products & services
  36. Key success factors (KSFs)
    key asset or requiste skill that all firms in an industry must possess in order to be a viable competitor
  37. 5 forces model says that a particular industry will earn low profits:
    • Rivalary/competition is intense
    • Barriers to entry are low
    • Threat of substitutes is high
    • Buyers of industry firms' products/services are powerful
    • Suppliers are powerful
  38. Rivalry tends to be more intense when:
    • Many competitors
    • Industry concentration is low & competitors are of more/less equal size
    • Market growth is slow
    • Product differentiation is low
    • Brand image/equity is low
    • Switching costs are low
    • Fixed costs are high
    • Exit barriers are high
  39. Entry tends to be easier when:
    • Capital requirements are relatively low
    • Product differentiation is low
    • Customers aren't concerned w/brand
    • Switching costs are low
    • Access to distribution channels is relatively easy
    • Incumbent firms do NOT have significant cost advantages
  40. Suppliers tend to be powerful when:
    • Few suppliers
    • What is being supplied is critical to industry firms
    • They control such factors as price, delivery lead times, etc
    • Costs to switch between suppliers is high
    • Industry firms would have hard time backward integrating
    • Firms in supply industry present a threat of forward integration
  41. Buyers are powerful when:
    • Few buyers & many industry firms
    • What industry firms provide is NOT critical to buyers
    • Easy for buyers to switch between industry firms
    • Buyers could readily backward integrate
    • Buyers know a lot about the product
    • Buyer group has numerous choices
  42. Complementor
    firm in one industry that provides products or services which tend to increase sales in another industry.
  43. Causal ambiguity
    condition whereby the difficulty of identifying or understanding a resource or capability makes it valuable, rare, & inimitable.
  44. Dynamic capabilities
    firm's ability to modify, reconfigure, & upgrade resources & capabilities in order to strategically respond to or generate environmental changes
  45. Strategic positioning
    ways that managers of a company situate (position) that company relative to its rivals along important competitive dimensions.
  46. Generic strategies
    strategic position designed to reduce the effects of rivalry, including low-cost, differentiation, focused cost leadership, focused differentiation, & integrated positions
  47. Low-cost leadership
    producing a good or offering a service while maintaining total costs that are lower than what it takes to offer the same product or service
  48. Focused cost leadership
    strategic position that enables a firm to be a low-cost leader in a narrow segment of the market
  49. Focused differentiation
    strategic position based on targeting products to relatively small segments
  50. Integrated strategic position
    elements of one position support strong standing in another
  51. Economies of scale
    exist during a period of time if the average total cost for a unit of production is lower at higher levels of output
  52. Diseconomies of scale
    average total cost per unit of production increases as higher levels of input
  53. Minimum efficient scale (MES)
    output level that delivers the lowest total average cost
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