Definitions of chapter 4

Unique strengths, embedded deep within a firm, that are critical to gaining and sustaining competitive advantage.

Any assets that a firm can draw on when formulating and implementing a strategy.

Organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically.

A model that sees certain types of resources as key to superior firm performance.

Resources that have physical attributes and thus are visible.

Resources that do not have physical attributes and thus are invisible.

Assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms.

Assumption in the resource-based view that a firm has resources that tend to be "sticky" and that do not move easily from firm to firm.

A theoretical framework that explains and predicts firm-level competitive advantage.

Barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy.

A situation in which the options one faces in the current situation are limited by decisions made in the past.

A situation in which the cause and effect of a phenomenon are not readily apparent.

A situation in which different social and business systems interact with one another.

A critical intangible resource that can provide a strong isolating mechanism, and thus help to sustain a competitive advantage.

A former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed.

A firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage.

A model that emphasizes a firm's ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment.

The firm's current level of intangible resources.

The firm's level of investments to maintain or build a resource.

The internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value.

Firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain.

Firm activities that add value indirectly, but are necessary to sustain primary activities.

A framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses with those from an analysis of external opportunities and threats to derive strategic implications.

we use financial data and ratios derived from publicly available accounting data such as income statement & balance sheets to assess competitive advantage 

net profits / invested capital

Net profits/revenue 

revenue/invested capital 

money provided by shareholders in exchange for an equity share in the company 

return on the risk capital 

total outstanding shares x share price (current moment)

idea that all info about firm's past, current state and expected  future performance is embedded in stock price 

difference between the buyers willingness to pay for a product and the firm's total cost to produce it 

maximum price consumer is willing to pay for a product based on the total perceived consumer benefit 

Strategy implementation tool that harnesses multiple internal and external performance metrics in order to balance financial and strategic goals.

Combination of economic, social, and ecological concerns that can lead to a sustainable strategy.

A strategy along the economic, social, and ecological dimensions that can be pursued over time without detrimental effects on people or the planet.

A firm's plan that details how it intends to make money.