Chapter 6

alexisturnbull's version from 2016-01-17 23:24


Question Answer
What are the steps of a strategy making process?assess needs for changes, conduct situational analysis, and choose alternatives
Portfolio strategyMinimizes risk by diversifying investment among various businesses or product lines
BCG matrixPortfolio strategy developed by the Boston Consulting Group that categorizes a corporation’s businesses by growth rate and relative market share
Growth strategyFocuses on increasing profits, or the number of places the company trades
Stability strategyFocuses on improving the way in which the company sells the same products or services to the same customers
Retrenchment strategyFocuses on turning around very poor company performance
RecoveryStrategic actions taken after retrenchment to return to a growth strategy
Character of the rivalryMeasure of the intensity of competitive behavior between companies in an industry
Threat of new entrantsMeasure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry
Threat of substitute products or servicesMeasure of the ease with which customers can find substitutes for an industry’s products or services
Bargaining power of suppliersMeasure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs
Bargaining power of buyersMeasure of the influence that customers have on a firm’s prices
Cost leadershipProducing a product of acceptable quality at consistently lower production costs than competitors
DifferentiationProviding a product that is different from competitors’ offerings that customers are willing to pay premium price for it
Focus strategyInvolves using cost leadership or differentiation to produce a specialized product
What are the positioning strategies?Focus, cost leadership, and differentiation
What are the industry forces?Character of rivalry, threat of new entrants, threat of substitute products, and bargaining powers of buyers and suppliers
Diversificationa strategy for reducing risk by buying a variety of items (stocks or, in the case of a corporation, types of businesses) so that the failure of one stock or one business does not doom the entire portfolio
Acquisitionthe purchase of a company by another company
Situational (SWOT) analysisan assessment of the strengths and weaknesses in an organization’s internal environment and the opportunities and threats in its external environment
Distinctive competencewhat a company can make, do, or perform better than its competitors
Core capabilitiesthe internal decision-making routines, problem solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs
Sustainable competitiveadvantage a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate
Resourcesthe assets, capabilities, processes, employee time, information, and knowledge that an organization uses to improve its effectiveness and efficiency and create and sustain competitive advantage
Competitive advantageproviding greater value for customers than competitors can

Recent badges