Term
|
Definition
| achieved by successfully formulating/implementing a value-creating strategy |
|
|
Term
|
Definition
| integrated/coordinated of commitments and actions designed to exploit core competencies |
|
|
Term
|
Definition
| achieved when firm implements a strategy that competitors find too difficult to duplicate or too costly to imitate |
|
|
Term
| What determines how long a competitive advantage exists? |
|
Definition
| speed at which competitors are able to acquire skills needed to duplicate the value-creating strategy |
|
|
Term
|
Definition
| cost paid and benefits received by customers |
|
|
Term
|
Definition
| returns in excess of what an investor expects to return from other investments with similar risk |
|
|
Term
|
Definition
| nvestors uncertainty about economic gains or losses that will result from an investment |
|
|
Term
|
Definition
| ROA, ROE, Return on Sales, Stock Market Returns, Amount or Speed of Growth |
|
|
Term
|
Definition
| returns equal to those an investor expects to earn from investments with similar risk |
|
|
Term
| two areas where average returns are found |
|
Definition
1. Firms without competitive advantage
2. Firms that are not in an attractive industry |
|
|
Term
| Two factors impacting competitive landscape |
|
Definition
1. Globalization
2. Technology Changes |
|
|
Term
|
Definition
| MNC--firm that gets at least 25% of its total sales revenue from outside parent home country |
|
|
Term
|
Definition
| Perpetual innovation--concept that describes how rapidly and consistently new technologies and information replace older ones |
|
|
Term
|
Definition
| focuses on home country’s market |
|
|
Term
|
Definition
| oriented towards markets of individual host countries |
|
|
Term
|
Definition
| truly world oriented and favors no one country’s market |
|
|
Term
| Two models (opposing) firms use to build competitive advantage: |
|
Definition
1. IO Model
2.Resource Based model of above average returns |
|
|
Term
| IO Model (Industrial Organization of above average returns) |
|
Definition
| industry that company competes has a stronger influence on performance than decisions and choices managers make inside company |
|
|
Term
| Core assumptions of the IO model |
|
Definition
1.external environment imposes constraints and pressures that determine strategies and above average returns
2. Firms in the same industry control similar resources and pursue similar strategies
3. resource differences between companies are short-lived
4.decision makers are rational and committed |
|
|
Term
|
Definition
| firms’ unique resources, capabilities, and core competencies have more influence on selecting strategies than does external environment |
|
|
Term
| Methods of influencing the environment: |
|
Definition
1. Advertising and Public Relations
2. Political Activity
3. Trade Associations |
|
|
Term
|
Definition
| a way that the company can use lobbyists to get their views expressed to state officials etc so that the government can side with them during political moments |
|
|
Term
|
Definition
| comprised of companies with similar interests with the purpose of influencing the environment through public relations or lobbying |
|
|
Term
| General Environment Dimensions (external environment) |
|
Definition
| comprised of dimensions in the broader society that will affect the organization either eventually or directly |
|
|
Term
|
Definition
| populations size, age, gender, ethnicity, etc. |
|
|
Term
|
Definition
| Represents the nature and direction of the economy |
|
|
Term
| Political/Legal dimension |
|
Definition
| organizations try to influence government regulations and it includes governmental laws and regulations at the local, state, and federal levels |
|
|
Term
|
Definition
| Society’s attitudes, customs, and values |
|
|
Term
|
Definition
| concerned with the creation and transfer of new knowledge |
|
|
Term
|
Definition
| product and resource markets |
|
|
Term
| industry environment (type of external environment) |
|
Definition
| compared to the general environment, the industry environment has a more direct impact on the company’s strategic actions |
|
|
Term
| Potential to new entrants: |
|
Definition
| A new entrant that will appear in our industry, and when there is a new competitor it threatens our market share (they are competing for our customers) |
|
|
Term
|
Definition
| occurs when a firm concentrates on its core competencies and then contracts with an outside vendor non core-activities |
|
|
Term
| outsourcing--value standpoint: |
|
Definition
| Purchase of a value-creating activity from an external supplier |
|
|
Term
| advantages of outsourcing: |
|
Definition
1. increased flexibility
2. mitigates risk
3. reduces capital investments
4. **Firms must only outsource activities where they cannot create value or where they have a substantial disadvantage compared to the competition |
|
|
