Managing Strategically - Details

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Is the set of actions that its managers take to outperform the company’s competitors and achieve superior profitability

Strategy

Sets forth how its strategy and operating approaches will create value for customers, while at the same time generating ample revenues to cover costs and realizing a profit. The two elements of a company"s business model are its 1, custumer value proposition and 2, it profit formula

Business Model

When an attractively large number of buyers develop a durable preference for its products or services over the offering of competitors , despite the efforts of competitors to overcome or erode its advantage

Sustainable competitive advantage

Is a combination deliberate planned elements and unplanned emergent elements. Some components of a company's deliberate strategy will fail in the market place and become abandoned strategy elements

Realized strategy

Describes "where we are going" -the course and direction management has charted and the company's future product custumer -market technology focus

A Strategic vision

Conveys a company's purpose in language specific enough to give the company its own identity

Mission Statement

Are the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission

Values

Are an organization's performance targets - the results management wants to achieve

Objectives

Set performance targets high enough to stretch an organization to perform at its full potential and deliver the best possible results

Stretch Objectives

When it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective

Strategic Intent

Relate to the financial performace targets management has established for the organization to achieve

Financial Objective

Relate to target outcomes that indicate a company is strengthening its market standing, competitve vitality, and future business prospects

Strategic Objective

Is a widely used method for combining the use of both strategic and financial objectives, tracking their achievement, and giving managment a more complete and balanced view of how well an organization is performing

Balanced Scorecard

Establishes an overall game plan for managing a set of businesses in a diversified, multibusiness company

Corporate Strategy

Is primarily concerned with strengthening the company's market position and building competitve advantage in a single business unit of a diversified multibusiness corporation

Business Strategy

Encompasses the broad environmental context in which a company is situated and is compromised of six principal components, political factors, economic conditions, sociocultural forces, technological factors and legal/regulatory conditions

Macro - Environment

Can be used to assess the strategic relevance of the six principal components of the macro-environment: political, economic, sociocultural, technological, environmental, and legal

PESTEL analysis

Are the major underlying causes of change in industry and competitive conditions

Driving Forces

Is a technique for displaying the different market or competitive positions that rival firms occupy in the industry

Strategic group mapping

Is a cluster of industry rivals that have similar competitive approaches and market positions

A Strategic Group

Are the strategy elements, product attributes, competitive capabilities, or intangible assets with the greatest impact on future success in the market place

Key success factors

Is a competitive asset that is owned or controlled by a company

Resource

Is the capacity of a company to competently perform some internal activity. Capabilities are developed and enabled through the deployment of a company's resources

Capability

Ask if a resources or capability is valuable, rare, inimitable, and nonsubstitutable

VRIN test for sustainable competitive advantage

Are two factors that inhibit the ability of rivals to imitate a firms most valuable resources and capabilities.

Social complexity and casual ambiguity

Makes it very hard to figure out how a complex resource contributes to competitve advantage and therefore exactly what to imitate

Casual ambiguity

Companies that lack a standalone resource that is competitively powerful may nonetheless develop a competitive advantage through ...........that enable the superior performance of important cros-functional capabilities

Resource Bundles

Is the ability to modify, deepen, or reconfigure the company's existing resources and capabilities in response to its changing environment or market opportunities

Dynamic capability

Identifies the primary activities that create customer value and related support activities

Value chain

Is a potent tool for learning which companies are best at performing particular activities and the using their techniques for "best practises" to improve the cost and effectivness of a company's own internal activities

Benchmarking

Is a method of performing an activity that consistently delivers superior results compared to othes approaches

A best practice

Concerns the specifics of management's game plan for competing successfully and securing a competitive advantage over rivals in the market place

Competitive Strategy

's basis for competitive advantage is lower overall costs than competitors'. Success in achieving a low-cost edge over rivals comes from eliminating end/or curbing "nonessential" activities and/or outmanaging rivals in performing essenntial activities.

A low cost leader

Is a factor having a strong effect on the cost of a company's value chain activities and cost structure

Cost driver

The essence of ........is to offer unique product or service attributes that a wide range of buyers find appealing and worth paying for.

Broad differentiation strategy

Is a value chain activity or factor that can have a strong effect on customer value and creating differentiation

Uniqueness driver

Are a hybrid of low-cost and differentiation strategies that aim at satysfying buyer expectations on key quality/features/performance/service attributes and beating customer expectations on price

Best -cost provider strategies

Offer growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand

Blue Ocean strategies

Because of ...., competitive advantage can spring from when a move is made as well as from what move is made

First mover advantages and disadvantages

Refers to the range of activities the firm performs internally, the breadth of its product and service offerings, the extent of its geographic market presence, and its mix of businesses

The scope of the firm

Is the range of product and services segments thar a firm serves within its focal market

Horizontal scope

Is the extent to which a firm's internal activities encompasses one, some, many, or all of the activities that make up an industry's entire value chain system, ranging from raw material production to final sales and service activities

Vertical scope

Is one that performs value chain activities along more than one stage of an industry's overall value chain

Vertically integrated firm

Involves performing industry value chain activities previously performed by supliers or other enterprises engaged in earlier stages of the industry value chain

Backward Integration

Involves performing industry value chain activities closer to the end user

Forward integration

Involves contracting out certain value chain activities to outside specialists and strategic allies

Outsourcing

Is a formal agreement between two or more companies to work cooperatively toward some common objective

Strategic alliance

Is a type of strategic alliance that involves the establishment of an independant corporate entity that is jointly owned and controlled by the two parties

A joint venture

Stem from instability or weakness in national governments and hostility to foreign business

Political risks

Stem from the instability of a country's monetary system, economic and regulatory policies, and the lack of property rights protections

Economic risks

Is its strategy for competing in two or more countries simultaneously

A company's international strategy

Calls for varying a company's product offering and competitve approach from country to country in an effort to be responsive to significant cross-country differences in customer preferences, buyer purchasing habits, distribution channels or marketing methods

A multidomestic strategy

Strategy-making approaches are also essential when host-government regulations or trade policies preclude a uniform, coordinated worldwide market operations

Think LOCAL, act LOCAL

Employ the same basic competiteve approach in all countries where a company operates and are best suited to industries that are globally standarized in terms of custumer preferences, buyer purchasing habits, distribution channels, or making methods. This is the think global, act global strategic theme

Global strategies

Is a think global, act local approach to strategy making that involves employing essentially the same strategic theme (low cost, differentiation, focused, best cost) in all country markets, while alowing some country to country customization to fit local market conditions

A transnational strategy

Posses competitvely valuable cross-business value chain and resource matchups

Related businesses

Unrelated Businesses

Exists when value chains of differenf businesses present opportunities for cross-business skills transfer, cost sharing, or brand sharing

Strategic fit

Are cost reductions steming from strategic fit along the value chains of related business (thereby, a larger scope of operations), whereas economies of scale accrue from a larger operation

Economies of scope

A diversified company exhibits .... when its buisnesses add to a company's overall mix of resources and capabilities and when the parent company has sufficient resources to support its entire group of businesses without spreading itself too thin

Resource Fit

A strong ........allows a diversified company to add value by shifting capital from business units generating free cash flow to those needing additional capital to expend and realize their growth potential

Internal capital market

Generates operating cash flows that are too small to fully fund its operations and growth, .......must receive cash infusions from outside sources to cover its working capital and investment requirements

Cash Hog

Generates operating cash flows over and above its internal requirements, thereby providing financial resources that may be used to invest in cash hogs, finance new acquisitions, fund share buyback programs, or pay dividends

Cash Cow

Is an independent company created when a corporate parent divests a business either by selling shares to the public via an initial public offering or by distributing shares in the new company to shareholders of the corporate parent.

Spin-off

Involves radically altering the business lineup by divesting businesses that lack strategic fit or are poor performances and acquiring new business that offer better promise for enhancing shareholder value

Corporate restructuring

Involves the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel

Business ethics

The same standards of what is ethical and what is unethical resonate with people of most societies, regardless of local traditions and cultural norms, hence, common ethical standards can be used to judge employee conduct in a variety of country markets and cultural circumstances

Ethical universalism

Different societal cultures and customs create divergent standards of right and wrong, thus, what is ethical or unethical must be judged in the light of local customs and social mores, and can vary from one culture or nation to another

School of ethical relativism

Universal ethical principles based on collective views of multiple cultures combine to form a social contract that all employees in all country markets have a duty to observe. Within the bounderies of this social contract, there is room for host-country cultures to exert some influance in setting their own moral and ethical standards. However, "first order" universal ethical norms always take precedence over "second order" local ethical norms in circumstances in which local ethical norms are permissive.

Integrative social contracts theory

Refers to a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities in which it operates and in society at large

Corporate social responsibility

Is defined by the specific combination of socially beneficial activities it opts to support with its contributions of time, money and other resources

Corporate social responsibility strategy

Are those that meet the needs of the present without compromising the ability to meet the needs of the future

Sustainable business practices

Involves deiberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against the ultimate endangerment of the planet

Environmental sustainability

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