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MGT 460 Midterm
Chapter 1
| Term | Definition |
|---|---|
| Strategic Competitiveness | achieved when a firm successfully formulates and implements a value-creating strategy |
| Strategy | an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. |
| Competitive Advantage | implementing a strategy that creates superior value for customers and that its competitors are unable to duplicate or find too costly to imitate |
| Above-Average Returns | returns in excess of what an investor expects to earn from other investments with a similar amount of risk |
| Risk | an investor's uncertainty about the economic gains or losses that will result from a particular investment (the most successful companies learn how to manage risk). |
| Average Returns | returns equal to those an investor expects to earn from other investments with a similar amount of risk. Inability to get these returns results in decline and eventually failure. |
| Strategic Management Process | full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness |
| A-S-P | Analysis: analyze its external environment and internal organization to determine its resources, capabilities, and core competencies Strategy: develop vision and mission and create strategy formulation and implementation Performance: competitiveness |
| The word strategy is Greek for... | "stratcgos" which means the General's plan to win |
| Global Economy | goods, servies, people, skills, and ideas move freely across geographic borders |
| Competitive Landscape | analysis that helps a business identify its on/offline rivals. Identify and understand competitors and their strength and weakness and how they can improve |
| Liability of foreignness | the risks of participated outside of a firm's domestic markets in the global economy |
| Strategic Flexibility | a set of capabilities use to respond to various demands and opportunities existing in a dynamic and uncertain competitive envrionment |
| Disruptive Technologies | technologies that destroy the value of an existing technology and create new markets |
| Perpetual Innovation | how rapidly and consistently new, information-intensive technologies replace older ones |
| Technology Trends Impacting the Global Competitive Environment are... | 1. Increase rate of technology diffusion and emerging of disruptive technology 2. The information age 3. Increasing knowledge intensity as an intangible source of competitive advantage |
| 5 steps of I/O model | 1. study external environment 2. Locate industry with high potential for above average returns 3. Identify industry's strategy for above average returns 4. Develop assets and skills needed 5. Use strengths for implementation EARN SUPERIOR RETURNS! |
| Resources | inputs into a firms production process ex. capital equipment, skills of employees, patents, finances, talented managers |
| Capability | the capacity for a set of resources to perform a task or an activity in an integrative manner |
| Core Competencies | resources and capabilities that serve as a source of competitive advantage for a firm over its rivals |
| Resource Based Model | The uniqueness of its resources and capabilities is the basis of a firm's strategy and its ability to earn above average returns |
| I/O vs. Resource | I/O: identify an attractive industry then create a strategy Resource Based: the strategy chosen should allow the firm to use its competitive advantage in an attractive industry |
| Types of Resources | physical, human and organizational capital (tangible and intangible) |
| 5 steps of Resource-Based Model | 1. Identify resources and compare to competitors 2. Identify capabilities and how they are better 3. Find potential of competitive advantage 4. Locate attractive industry 5. Select a Strategy EARN SUPERIOR RETURNS! |
| Vision | The foundation for the firms mission. A picture of what the firm wants to be and what it wants to ultimately achieve. Vision statement is short and concise, easy to remember |
| Mission | Specifies the business or businesses in which a firm intends to compete and the customers it intends to serve |
| Stakeholders | individuals, groups, and organizations that can affect the firm's vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm's performance |
| Capital Market Stakeholders | Shareholders and major suppliers of capital such as banks |
| Product Market Stakeholders | Customers, suppliers, host communities, and unions |
| Organization Stakeholders | Employees and Managers |
| Strategic Leaders | people located in different areas and levels of the firm using the strategic management process to select strategic actions that help the firm achieve its vision and fulfill its mission |
| Organization Culture | the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business |
Created by:
jennshaw92
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