Strategic Management Chapter 1

The process of improving financial performance, strengthening competitive position, and achieving a sustainable competitive advantage.

A firm's ability to outperform its competitors by providing superior value to customers.

A competitive advantage that is difficult for rivals to replicate or imitate, enabling a firm to maintain its superior position over time.

A coherent action plan that guides a firm toward achieving its objectives and superior performance.

Key strategic considerations: attracting customers, positioning in the market, competing, achieving targets, responding to change, and pursuing growth opportunities.

A strategy focused on providing goods or services at lower costs than competitors.

A strategy based on creating unique products or services that provide higher value to customers.

A strategy that balances value and low price to appeal to a broad customer base.

A strategy that concentrates on serving a specific market segment effectively.

Explaining how a company meets customer needs.

Details how a firm generates profit from customers.

Ensuring strategy aligns with the firm's environment, resources, and capabilities.

Whether a strategy can provide a sustained, difficult-to-replicate advantage.

Assess if generated profitability and market position are strong.

A firm's ability to maintain a favorable market position over time, making it difficult for rivals to copy.

A framework for understanding business models, emphasizing the relationship between customer perceived value, pricing, and cost of production.

A framework for evaluating a firm's internal strengths and weaknesses, and external opportunities and threats.

A model depicting the layers of competitive advantage, from core competencies to sustainable dominance.

A framework outlining five key elements of strategy (Arenas, Vehicles, Differentiators, Staging, Economic Logic)

A framework outlining the steps involved in putting a strategy into action, from vision and goals through action plan and feedback loop.

The need for a strategy stems from factors like finance, competition, and sustainability.

A strategic model outlining how businesses must operate to succeed.

A systematic way of setting and achieving business goals.

Strategy is a long-term plan encompassing broader focus, Business models define how a firm makes money, focusing on revenue generation.

Three key components to test a winning strategy: Fit, Competitive Advantage, and Performance.

A company's ability to maintain a superior position in the market over the long haul.

Economic, Sociocultural, Technological, Environmental, Legal factors influencing a business environment

Analyzes competition intensity in an industry, affecting profitability

Intensity of competition between existing players in an industry

Barriers for new businesses entering an industry

Alternatives available to replace a product or service

Buyer's influence on pricing and terms

Supplier's influence on prices and supply

Focuses on co-opetition (cooperation and competition) with complementors

Identifies industry change drivers and their impact on profitability

Identifies firms with similar industry strategies

Examining competitors using Strategy, Objectives, Assumptions, and Resources

Essential product attributes, resources, and capabilities for industry success

Industry characterized by above-average profitability opportunities

Industry with low profitability and weak competitor activity

Assessing firm and rival strengths on key success factors (KSFs), calculating weighted scores for each. Higher scores = stronger competitive position.

Exploiting rival weaknesses using a firm's strengths.

Addressing a firm's vulnerabilities to reduce risks.

Plan for how a firm competes, including cost advantage, differentiation advantage, and focus (niche) strategies.

Strategy based on delivering products at lower costs than competitors.

Strategy emphasizing unique features like design or branding.

Targeting niche markets with specific needs.

Balancing low price with the higher attributes of differentiated products.

Aiming to offer lowest prices across a broad consumer base.

Creating unique products attracting a wide target market.

Offering lowest price within a specific niche market.

Creating a niche advantage by focusing on a segment's specialized needs.

Evaluating internal strengths and weaknesses, and external opportunities and threats to guide strategic decision making.

The practical applications and consequences of using a particular strategy.

The process of implementing a strategy effectively to achieve organizational goals.

Distributing necessary resources (money, time, personnel) to support strategy execution.

Organizing the workforce to best support strategy execution, often with centralized vs. decentralized power dynamics

Hiring and keeping employees who have the skills needed to implement the strategy.

Using tools to monitor progress toward strategic goals.

Implementing processes to enhance effectiveness over time.

Creating a company culture that encourages action and strategy implementation.

Rules and regulations that aid strategy implementation.

Rewarding and motivating people for achieving strategic goals.

Strong leadership guiding employees toward strategy execution.

A company culture that encourages accountability and striving for success.

Company environment that encourages innovation and change.

A tool to visualize how companies in an industry position themselves in relation to each other based on key strategic dimensions, revealing competitive positions.

Critical elements that determine a company's success in an industry.

What competitive areas do customers care most about? What resources and capabilities do companies need to succeed? What is the most effective way to handle competition?

Assessing a company's internal resources, capabilities, and competitiveness.

Identifying a company's strengths, weaknesses, opportunities, and threats.

Competitive advantages and core competencies of a firm.

Areas where a firm is deficient, hindering competitiveness.

Emerging growth areas, markets, and industry trends.

External challenges like new competitors, regulations, or market shifts.

A strategic planning tool that uses SWOT analysis to identify potential strategies (SO, ST, WO, WT).

Tangible and intangible assets of a company (e.g., facilities, brand).

Organizational skills to effectively deploy resources.

Unique strengths central to a strategy and sustained advantage.

Adaptability and renewal of resources to maintain competitiveness.

Framework to evaluate resources and capabilities (Value, Rarity, Inimitability, Non-substitutability).

Breakdown of activities in a company into primary and support activities to identify areas of improvement.

Comparing a company's performance with competitors or industry leaders.