Strategy Vocabs and Frameworks

performance of two or more firms at the same level

Skill of vision and decision-making that enables the organization to achieve competitive advantage

A conceptual framework that states that it's the top management team that primarily determines the success or failure of an organization through the strategies they pursue.

5: Executive
4: Effective Leader
3: Competent Manager
2: Contributing Team Member
1: highly capable individual

the procces of finding: where and how to compete

putting strategic plans into effect

where to compete (industry, markets, region)

how to compete (cost-ledership, differentiation, value innovation)

an integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage

describe the underlying economic structure of the industry (barriers, competitors, type of products)

the set of companies that pursue a similar strategy within a specific industry

unique strength embedded deep within a firm, gained by resources and capabilities

assets (cash, buildings, mashinery, intellectual property)

A theoretical framework that explains and predicts firm-level competitive advantage.
(Value, Rarity, Imitability, Organization)

-accounting profitability
-shareholder value creation
-economic value creation

-All accounting data are historical and thus backward-looking
-Accounting data do not consider off-balance sheet items
-Accounting data focus mainly on tangible assets, which are no longer the most important

A top-down management system that organizations can use to clarify their vision and strategy and transform them into action

people, planet, profit

Choices between a cost or value position.
Such choices are necessary because higher value creation tends to generate higher cost.

gaining competitive advantage by creating higher value at similar cost

gaining competitive advantage by creating a similar produt at lower cost

savings that come from producing two (or more) outputs at less cost than producing each output individually

Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation

1. Eliminate: 2. Reduce; Factors which lower cost
3. Raise: 4. Create; Factors which create value

idea, invention, innovation, imitation

introduction, growth, shakeout, maturity, decline

improves existing product.
targets: existing markets
using: existing technology

draws on new methods, materials
creates: new markets
using: new technology

new product based on known components
creates: new markets
using: existing technology

leverages new technologies to attack existing markets

1. Vertical Integration
2. Diversification
3. Geographic Scope

all internal and external costs associated with an economic exchange, whether within a firm or in markets

1. Raw Materials
2. Components, Intermediate goods
3. Final assemby, Manufactoring
4. Marketing and Sales
5. After sales services

moving one or more internal value chain activities outside the firm's boundaries to other firms in the industry value chain

when a firm operates in multiple industries or markets simultaneously

corporate strategy in which a firm is active in several different product markets

corporate strategy in which a firm is active in several different countries

corporate strategy in which a firm is active in several different product markets and several different countries

1. Single business
2. Dominant business
3. Related diversification
4. Unrelated diversification: the conglomerate

1. aliance champion
2. alliance leader
3. alliance manager

framework by Pankaj Ghemawat which helps MNEs to decide where to compete.
(Cultural, Administrative, Geographic, Economic)

selling the same products or services in both domestic and foreign markets
(low pressure for local responiveness;
low p. for cost reduction)

customizing products and marketing strategies to specific national conditions (high p. LR; low p CR)

strategy attempting to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best-of-class capabilities reside at the lowest cost
(low p. LR; high p. CR)

strategy that attempts to combine the benefits of a localization strategy (high local responsiveness) with those of a global-standardization strategy (lowest-cost position attainable)