Management 478 Strategic Management

Strategic Competitiveness
Is achieved when a firm successfully formulates and implements a value creating strategy.
Strategy
Is an integrated and cooredinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.
Competitive advantage
A firm implements a strategy competitors are unable to duplicate or find too costly to try 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.
Average returns
returns equal to those an investor expects to earn from other investments with a similar amount of risk.
Strategic management process
the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above average returns.
Global economy
on in which goods, services, people, skills, and ideas move freely across geographic borders.
Strategic flexibility
a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.
Resources
inputs into a firm’s production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers.
Capability
the capacity for a set of resources to perform a task or an activity in an integrative manner.
Core competencies
capabilities that serve as a source of competitive advantage for a firm over its rivals.
Vision
is a picture of what the firm wants to be and, in broad terms, what is wanted to ultimately achieve.
Mission
specifies the business or businesses in which the firm intends to compete and the customers it intends to serve.
Stakeholders
the individuals and groups who can affect the firm’s vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm’s performance.
Strategic leaders
people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission.
Organizational culture
refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business.
Profit pool
entails the total profits earned in an industry at all points along the value chain.