Term
| Assets used to create and support offerings to customers or clients |
|
Definition
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|
Term
| Have a physical reality – examples are buildings, machinery, and supplies |
|
Definition
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|
Term
| Are not directly visible – examples are knowledge and reputation |
|
Definition
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|
Term
| Combinations of resources that create values |
|
Definition
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|
Term
| Systematize the knowledge required to create and replicate capabilities needed by the organization |
|
Definition
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Term
| The organization’s unique resources, capabilities, and routines; more important for understanding profitability |
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Definition
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Term
| Activity that follows patterns observed in the behavior of others; is often strategic |
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Definition
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Term
| Arise from the interaction of individuals and other resources; they are difficult to understand, but result in more than the apparent sum of their parts |
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Definition
| Socially Complex Activities |
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Term
| Support current activity; include the company’s investments in employee rewards; determine whether an advantage will be sustained or whether a new competitive advantage can be developed |
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Definition
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Term
| Accumulate from investments over time to support competitive advantage; underlies current competitive advantage |
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Definition
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Term
| (formal and informal) results in newcomers understanding “how we do things here.” |
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Definition
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|
Term
| An estimate of the uncertainty about outcomes associated with every activity |
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Definition
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|
Term
| Refers to the lack of readily apparent connection between a firm’s activities and its competitive success |
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Definition
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|
Term
| In the environment reduces or extinguishes the value of past asset stocks |
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Definition
| Competence-Destroying Change |
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Term
| In the environment increase the value of resource stocks |
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Definition
| Competence-Enhancing Change |
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Term
| Resources are competitive resources because they have the following characteristics: |
|
Definition
Rare
Nontradable
Non substitutable
Inimitable
Flexible
Nonappropriable |
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Term
| 6 Key aspects of creating sustainable advantage |
|
Definition
Branding
Supporting Activities
Investment
Position
Accumulation
Socialization |
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Term
| Four contributing factors of risk |
|
Definition
Uncertain capacity to accumulate assets
Causal ambiguity
Over Commitment
External Attribution |
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Term
| How is resource accumulation and development strategically managed? (7 steps) |
|
Definition
1. Attend to Necessary Resources
2. Determine Competitive Advantage
3. Define Distinctive Competencies
4. Decompose Distinctive Competencies to Focus Investment
5. Look for Opportunities to Leverage Resources
6. Plans for the Ongoing Renewal of Resources
7. Watch of for Competence-Destroying Change and Capitalize on Competence-Enhancing Change |
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Term
| Allows for a large number of customers to personalize product characteristics |
|
Definition
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Term
| Focuses on identifying and servicing customer needs and desires |
|
Definition
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Term
| A measure of the amount of user involvement in planning, executing, and delivering a good or service |
|
Definition
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|
Term
| Summarizes the knowledge, skills, and capabilities used by an organization to produce goods and services |
|
Definition
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|
Term
| Support the process of consuming an organization’s offerings |
|
Definition
| Experience-Oriented Strategies |
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Term
| Directly involves customers in the creation of the goods, services, or experiences they consume |
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Definition
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|
Term
| Strategies allocate costs between members of an alliance, including alliances between customers and producers |
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Definition
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|
Term
| Assume that most people are intrinsically well-meaning in their interactions with others |
|
Definition
| Positive Models of Human Behavior |
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Term
| What do successful customer-centered strategists do? |
|
Definition
o Respect customers as capable of identifying and making decisions about their needs
o Assume that the needs and interests of the customer will change and require adaptation by the organization
o Adopt a partnership perspective in responding to customer needs |
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Term
| Support and reinforce satisfying customers |
|
Definition
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|
Term
| Enables one resource to increase the impact of others |
|
Definition
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|
Term
| Summarizes contact with a product or service from a customer’s perspective |
|
Definition
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|
Term
| Indicate market distinctions made by a significant number of customers or potential customers |
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Definition
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|
Term
| Sets of firms offering interconnected products, services, or experiences |
|
Definition
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|
Term
| Competitive settings where firms provide the same or similar sets of products |
|
Definition
|
|
Term
| 4 descriptions of competitive environments |
|
Definition
Monopoly
Oligopoly
Hypercompetition
Pure Competition |
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|
Term
| Occurs when a limited number of producers compete for buyers in relatively predictable ways |
|
Definition
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|
Term
| Exists when a significant number of rivals complete intensely and less predictable for competitive advantage |
|
Definition
|
|
Term
| The 2 questions Michael Porter set out to answer in his books on strategy |
|
Definition
1. What makes a competitive environment attractive to new entrants or to existing competitors? (Which types of settings earn high profits?)
- Corporate Strategy
2. How does a firm compete? (What is the basis for high-than-average returns?)
- Business Strategy |
|
|
Term
| Porter's 6 Forces affecting Profitability |
|
Definition
1. Power of rivals
2. Power of Buyers
3. Power of Suppliers
4. Power of Substitutes
5. Power of New Entrants
6. Power of Complements |
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Term
| Conditions that increase the cost of leaving a competitive environment |
|
Definition
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|
Term
| Costs incurred when changing suppliers |
|
Definition
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|
Term
Exists when actors coordinate their activities to their mutual advantage
- Often limited by laws |
|
Definition
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|
Term
| Coordination to mutual advantage without direct communication |
|
Definition
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|
Term
| Conditions that increase the cost of competition for potential entrants |
|
Definition
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|
Term
| A willingness of current industry participants to use their resources to respond aggressively to competitive moves, including entry |
|
Definition
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|
Term
| Provides strategists and other stakeholders with an assessment of a specific competitive environment |
|
Definition
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|
Term
| Subsets of firms in a competitive setting that follow similar strategies |
|
Definition
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|
Term
| Looking at things from a sociocultural, technological, economic, and politic perspective |
|
Definition
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|
Term
| Differences among firms that explain difference in probability |
|
Definition
|
|
Term
| Provide value to customers at lower cost than competitors |
|
Definition
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|
Term
| One or more unique attributes that buyers are willing to pay a price premium to receive (Mercedes) |
|
Definition
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|
Term
| Concentrate on achieving cost or differentiation advantages with a unique segment of the overall market. The trade off is a smaller market. (Orange County Choppers) |
|
Definition
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|
Term
| Strategies that try to simultaneously implement more than one generic strategy |
|
Definition
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|
Term
| Drop currently profitable offering in favor of replacements that typically precede market demand. |
|
Definition
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|
Term
| Strategies that involve legally working with others suppliers, buyers, complements, competitors) to achieve mutually valued objectives. |
|
Definition
|
|
Term
| 2 areas where firms are finding collaboration helpful within the same industry: |
|
Definition
1. Just in Time Manufacturing
2. Research and Development |
|
|
Term
| 2 examples of cross-industry collaboration |
|
Definition
1. Community contributions (response to Katrina)
2. Interest Group Participation (organizations banding together to influence policy) |
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Term
| Summarize how strategic decision are expected to make a profit |
|
Definition
|
|
Term
| A formal and complete overview of company activities, followed by detailed financial analysis |
|
Definition
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|
Term
| Customers pay a periodic fee for access to a specified good, service, or experience (ex: Netflix) |
|
Definition
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|
Term
| Customers buy a game console and anticipated profits come primarily from premium games sold by the manufacturer (ex: printer and ink cartridges) |
|
Definition
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|
Term
| Brokers are market makers who bring buyers and sellers and facilitate exchanges (ex: ebay.com) |
|
Definition
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|
Term
| An extension of the classic media model that provides free content mingled with advertising (ex: google.com, yahoo.com) |
|
Definition
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|
Term
| Provides a valuable product or service in exchange for detailed buying information (nytimes.com) |
|
Definition
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|
Term
| Classic wholesalers and retailers (ex: amazon.com) "e-tailer" |
|
Definition
|
|
Term
| Reap the benefits of early entry into an emerging market |
|
Definition
|
|
Term
| The relationship between cost and units produced (costs fall exponentially as cumulative output increases) |
|
Definition
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|
Term
| The set of attributes that customers expect in a given market |
|
Definition
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|
Term
| Identify the primary and supporting activities used by an organization to create value for customers |
|
Definition
|
|
Term
| 5 Primary Activities that are necessary in most business models according to Michael Porter |
|
Definition
1. Inbound Logistics (receipt and storage of Raw materials)
2. Operations (creation of product/service)
3. Outbound Logistics (Getting product/service to final customer)
4. Marketing and Sales (promotion of product or service)
5. Service |
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|
Term
| 4 main supporting activities that affect all primary activities |
|
Definition
1. Firm infrastructure
2. HR management
3. Technology Development
4. Procurement (acquiring raw materials) |
|
|
Term
| What are the most successful types of business models? |
|
Definition
| Models that link the seller’s value chain to the user’s value chain of activities |
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|
Term
| Help identify critical aspects of a problematic situation (ex: Porter’s five forces, generic strategies, life cycle models) |
|
Definition
|
|
Term
| Outlines a generalized progression of growth and decline |
|
Definition
|
|
Term
| 4 stages of the business life cycle at the industry level |
|
Definition
1. Birth of new offering
2. Systems
3. Solutions
4. Relationships |
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|
Term
| Occurs when every product or service is produced to specified requirements and occurs at the end of this stage |
|
Definition
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|
Term
| Cost savings enjoyed through more efficient production of larger volumes of a product or service |
|
Definition
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|
Term
| Packages of the goods or services that meet an end user’s needs – the product, service, or experience package is no longer viewed as isolated components |
|
Definition
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|
Term
| Make or alter a product, services, experience combination to meet individual or personal specifications |
|
Definition
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|
Term
| The practice of grouping a set of offerings together as a package |
|
Definition
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|
Term
| Helps firms collect and analyze data about customers |
|
Definition
|
|
Term
| Franchisor provides a proven formula for success, training, and trademark supported by a much larger advertising budget than individual franchisees could afford |
|
Definition
|
|
Term
| Describes a procedure that has been particularly successful for a firm |
|
Definition
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|
Term
| Refers to the practice of comparing a unit’s performance, usually on specific evaluative criteria, to the best performance of similar units in other companies |
|
Definition
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|
Term
| A pool of ideas from other firms that strategists can adapt to their own unique situation |
|
Definition
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|
Term
| The practice of drawing innovative ideas from multiple sources outside formal R&D departments |
|
Definition
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|
Term
| Determines the industries where the corporation will operate and what activities will be undertaken by firms within the corporation |
|
Definition
|
|
Term
|
Definition
| A strategy in which one firm buys a controlling or 100% interest in another firm |
|
|
Term
| A strategy in which two or more firms form a relationship in order to pursue mutual interests that have implications for the long-term |
|
Definition
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|
Term
| The range of activities within a single firm or corporation |
|
Definition
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|
Term
| Refers to the overall size of a business, usually measured by annual revenues, unit volumes, or total assets |
|
Definition
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|
Term
| An external growth strategy in which the firm expands its scope to include business competing in different markets |
|
Definition
|
|
Term
| 3 ways expansion can enhance the performance of firms: |
|
Definition
o Financial Growth: Increasing the overall stream of revenues flowing into the business
o Financial Stability: Leveling out or smoothing the revenues, profits, and cash flow of the business
o Shared Costs: Spreading the costs of rent, employee salaries, advertising, accounting services, and other business activities across higher unit sales volume |
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|
Term
| When firms find a desired product or service in the market, and come together for an exchange |
|
Definition
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|
Term
| When a company will use the corporation’s hierarchical control mechanisms to organize their economic relationship |
|
Definition
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|
Term
| When currencies are exchanged for a product or service and the transaction is immediate |
|
Definition
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|
Term
| Formal relationships between companies that detail the provision of the quantities, prices, specifications, and delivery of products or services over time |
|
Definition
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|
Term
| Frequent but informal relationships between parties based on trust and reputation |
|
Definition
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|
Term
| Alliances between multiple companies that focus on a particular set of activities that are linked by common agenda |
|
Definition
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|
Term
| A formal relationship between two or more firms to create a new business or carry out some kind of mutually beneficial activity |
|
Definition
|
|
Term
| 2 types of analysis used to determine how to structure an economic relationship |
|
Definition
o One focusing on the costs of the transaction
o Focusing on leveraging and developing core competencies |
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|
Term
| Examines the efficiency of creating and monitoring economic relationships |
|
Definition
| Transaction Cost Analysis |
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|
Term
| One party taking advantage of another by neglecting or shrinking their obligation (a common assumption of TCA) |
|
Definition
|
|
Term
| Defines the logic for external growth and corporate-level resource allocation across multiple business units |
|
Definition
|
|
Term
| 4 types of diversification strategy |
|
Definition
Dominant Businesses
Related-Constrained Diversifiers
Related-Linked Diversifiers
Unrelated Diversifiers |
|
|
Term
| Companies in which most or all of the firm’s revenues come from 1 industry |
|
Definition
|
|
Term
| Corporations that compete in a set of industries in which a common pool of competencies enhances economic performance |
|
Definition
| Related-Constrained Diversifiers |
|
|
Term
| Corporations that compete in industries are linked to one another in some way, often along the chain of production (RM – Manufacturing – Distribution) |
|
Definition
| Related-Linked Diversifiers |
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|
Term
| Corporations in which most of the businesses in the company’s portfolio are in unrelated industries, not linked along a value chain and not related by a common set of competencies |
|
Definition
| Unrelated Diversifiers (Conglomerates) |
|
|
Term
| Represents the skills or knowledge used by a corporation to add value across multiple business units |
|
Definition
|
|
Term
| A strategic choice to contract corporate boundaries |
|
Definition
|
|
Term
| What type of analysis focuses on the direct costs of producing a good or service (efficiency or effectiveness of competing) |
|
Definition
|
|
Term
| Corporate Parent Metaphor |
|
Definition
o Good corporate parents add value to the businesses that they own
o Bad corporate parents impose systems that cause business units to perform below what they would if they were on their own |
|
|
Term
| Different situations that create parenting opportunities |
|
Definition
Size and Age
Management
Business Definition
Predictable errors:
Linkages
Common Capabilities
Special Expertise
External Relations
Major Boundary Decisions
Strategic Changes |
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|
Term
| 2 major barriers to acquiring valuable knowledge in an alliance |
|
Definition
| concerns about knowledge spillovers and the tacitness of the knowledge shared |
|
|
Term
| The risk that the knowledge of one firm will inadvertently transfer to others |
|
Definition
|
|
Term
| Know-how that is difficult to codify and transfer |
|
Definition
|
|
Term
| 3 principles that are important to more effective learning in strategic alliances |
|
Definition
o The relationship must have a sufficient number of connections between the partners
o The knowledge goals of the relationship should be related to what an organization already knows
o The organizational cultures of potential partners must be aligned |
|
|
Term
| Ability to learn from external sources |
|
Definition
|
|
Term
| See and understand customer needs, find and combine resources, develop innovative solutions, take risks and strive to make a profit |
|
Definition
|
|
Term
| Group of individuals who bring their collective and often complementary skills and resources to a new venture |
|
Definition
|
|
Term
| A new idea that is brought to market |
|
Definition
|
|
Term
| One who starts a number of entrepreneurial efforts over time |
|
Definition
|
|
Term
| Significant Departure from currently available product or service offerings |
|
Definition
|
|
Term
| Contribute to the improvement of existing product or service offerings |
|
Definition
|
|
Term
| Describes an organization's ability to promote autonomy, innovativeness, proactiveness, competitive aggressiveness, and risk taking |
|
Definition
| Entrepreneurial Orientation |
|
|
Term
| Discovering an idea and forming it into a business concept |
|
Definition
|
|
Term
| The time-sensitive match between the entrepreneur's recognition of opportunity and occurrence of market need |
|
Definition
|
|
Term
| Evaluates the human and financial resources available for launching a new venture |
|
Definition
|
|
Term
| Resource that is required to produce a good or service |
|
Definition
|
|
Term
| Not directly required to produce a good or service, but are helpful for acquiring needed resources |
|
Definition
|
|
Term
| The resource pool available from relationships with others |
|
Definition
|
|
Term
| Changes in the product or service offered to an existing or new market |
|
Definition
|
|
Term
| Do not change the offering itself, but change the way in which the organization operates |
|
Definition
|
|
Term
| Makes existing product or service obsolete |
|
Definition
| Competence-Destroying Innovations |
|
|
Term
| The first few percent of a new offering’s users who try product or service because of its innovative qualities |
|
Definition
|
|
Term
| The larger group of users who are drawn to an offering’s innovative qualities but tend to be more evaluative than innovators |
|
Definition
|
|
Term
| Compared to innovators, tend to be less responsive to technological or innovative content and more responsive to practical features and credibility |
|
Definition
|
|
Term
| The large, conservative group in a community slower than all except the laggards |
|
Definition
|
|
Term
| The users in a community who are slowest to adopt a new product |
|
Definition
|
|
Term
| Similar to majority of innovation’s users and are willing to help the producers improve their product, service or experience |
|
Definition
|
|
Term
| Recognizes that vulnerability that comes from lack of experience, industry recognition and customer familiarity |
|
Definition
|
|
Term
| The financial requirement for initiating a new venture |
|
Definition
|
|
Term
| The use of an entrepreneurial individual’s personal resources to finance a new venture |
|
Definition
|
|
Term
| Private individuals who provide seed capital to early-stage ventures |
|
Definition
|
|
Term
| Sell stock in a new venture to individual and institutional investors |
|
Definition
|
|
Term
| The opportunity to obtain exclusive rights to a brand and business model in a specific locality in return for a royalty |
|
Definition
|
|
Term
| Investors who search for and provide capital to entrepreneurs |
|
Definition
|
|
Term
| An effort by enterprises with large, established businesses to discover new opportunities |
|
Definition
| Corporate Entrepreneurship |
|
|
Term
| The tendency to continue in a current state |
|
Definition
|
|
Term
| Sources of current success that make new venture development difficult |
|
Definition
|
|
Term
| The independent units of larger organizations that are temporarily given autonomy to develop new ideas |
|
Definition
|
|
Term
| People who argue for innovation’s support in an organizational setting, stimulating allocation of capital and required cooperation |
|
Definition
|
|
Term
| Attempts to optimize current performance while simultaneously preparing for strategic changes that are expected to be necessary in the future |
|
Definition
|
|
Term
| Manage the inconsistent demands of supporting current businesses while developing new entrepreneurial opportunities |
|
Definition
| Ambidextrous Organizations |
|
|
Term
| The trend toward a more integrated and interdependent world economy |
|
Definition
|
|
Term
| Unit cost reductions achieved by producing products at the most efficient volume |
|
Definition
|
|
Term
| Result from spreading activities across multiple products or businesses |
|
Definition
|
|
Term
| Resources that firms can draw on in a given country to produce goods and services |
|
Definition
|
|
Term
| 4 important issues related to factor endowments |
|
Definition
1. Factor conditions: basic (e.g. natural resources) and advanced (e.g. communication, transportation infrastructure, skilled labor force)
2. Firm strategy, structure, rivalry (competitive environment in a particular location)
3. Demand conditions (size, structure, needs of company’s home market)
4. Related and supporting industries (e.g. suppliers, distributors, complements) |
|
|
Term
| Strategies that utilize domestic resources and capabilities to expand sales and operations across more than one country boundary |
|
Definition
|
|
Term
| Develop products, services, and experiences that respond to national differences |
|
Definition
| Multi-domestic Strategies |
|
|
Term
| Emphasizes responsiveness to local needs and global efficiency simultaneously |
|
Definition
|
|
Term
| Integrates international operations to achieve low cost and differentiation advantages in multiple economies |
|
Definition
|
|
Term
| Attends to differences in local markets but also caries out some activities on a global basis |
|
Definition
|
|
Term
| 5 Alternative entry modes into international markets |
|
Definition
Export (The Right Stuff)
License
Franchise
Joint Venture (Starbucks)
Wholly owned subsidiary |
|
|
Term
| New operations created "from the ground up" as a wholly owned subsidiary |
|
Definition
|
|
Term
Firms and activities that are interlinked and exist in the same local and regional setting (based on economic, social, institutional factors)
Also called networks, centers of excellence, and industrial districts |
|
Definition
|
|
Term
|
Definition
Concentration in geographic areas
Communication possibly through highly social face-to-face interaction over a long period of time
Increases in learning and innovation
Trust increases too- facilitating contracting and exchange
Common business culture reduces uncertainty |
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