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Difference between competence & core
competence
A competence is an activity the company performs consistently well- a true capability, whereas a core competence is a proficiently performed internal activity that is centralto a company's strategy and competitiveness.A company's strengths and competitive assets are not all equal. TERM 2
What do a company's resources
include?
DEFINITION 2 Competitive assets that are owned or controlled by a company-TANGIBLE such as physical, financial, technological, and organizational resourcesINTANGIBLE such as human assets, intellectual capital, brands, company image, reputation, relationships, company culture, and incentive system. TERM 3
What is a distinctive competence?
DEFINITION 3 A competitively important activity that a company performs better than its rivals - it thus represents a competitively superior internal strength. TERM 4
DEFINITION 4 A TERM 5
6 Questions that comprise the task of a
company's resources
DEFINITION 5 How well is the firm's present strategy working? What are the firm's competitively important resources and capabilities? Is the firm able to take advantage of market opportunities and overcome external threats to its external well-being? Are the firm's prices and costs competitive with those of key rivals, and does it have an appealing customer value proposition? Is the firm competitively stronger or weaker than key rivals? What strategic issues and problems merit front-burner managerial attention?
What a company has to have for
competitively important resources and
capabilities
An understanding of the companies competitive assets TERM 7
What a company's capabilities & resources
represent
DEFINITION 7 They represent the company's competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace. TERM 8
Ways to achieve a cost advantage over
rivals
DEFINITION 8 Perform value chain activities more cost-effectively than rivals. Revamp the firm's overall value chain to eliminate or bypass some cost-producing activities. TERM 9
DEFINITION 9 A TERM 10
What is differentiation?
DEFINITION 10 Outcompeting rivals and achieving a competitive advantage because of their ability to meet customer needs more effectively than rivals - one way is to be sufficiently innovative to thwart the efforts of clever rivals to copy or closely imitate the product offering.
What is a strategic
choice?
Making a choice that compliments a competitive approach and maximizes the power of strategy. TERM 17
What are the advantages of being a late
mover?
DEFINITION 17 When pioneering is more costly than limiting & offers negligible experience or learning-curve benefits When the products of an innovator are somewhat primitive & do not live up to buyer expectations When rapid market evolution allows fast followers to leapfrog a 1st mover's products w/ more attractive next-version products. When market uncertainties make it difficult to ascertain what will eventually succeed. TERM 18
What is horizontal scope?
DEFINITION 18 The range of product and service segments that firm serves within its focal market. TERM 19
What is the heart & soul of strategic making
effort
DEFINITION 19 The actions & moves in the marketplace that managers are taking to gain a competitive advantage over rivals. TERM 20
Define company business model
DEFINITION 20 Managements blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit.
What every strategy needs
Distinct element that attracts customers TERM 22
Objective of well-crafted strategy
DEFINITION 22 Always makes money and always gives a competitive advantage TERM 23
Why crafting and executing a strategy are top
priority tasks
DEFINITION 23 A clear and reasoned strategy is managements prescription for doing business, its road map to competitive advantage, its game plan for pleasing customers, and its formula for improving performance. TERM 24
Define strategy
DEFINITION 24 Action plan for out-performing competitors and achieving superior profitability. "How to compete" How to attract/please customers How to compete against rivals How to position the company How 2 best respond to changing economic/market conditions How to capitalize on attractive opportunities to grow business How to achieve the company's performance targets TERM 25
What is the test for distinguishing the
marriage of a winning strategy?
DEFINITION 25 The fit test:How well does the strategy fit the company's situation? It needs to exhibit a good external fit (market conditions) and at the same time, must exhibit a good internal fit (competence, abilities).Also should show dynamic fit- they evolve over time.
C
TERM 32
Define strategy group
mapping
DEFINITION 32 A technique for displaying the different market or competitive positions that rival firms occupy in the industry. TERM 33
When rivalry increases
DEFINITION 33 Buyer demand is growing slowly or declining It is becoming less costly for buyers to switch brands Industry products are becoming less differentiated There is unused production capacity, and/or products have high fixed costs or high storage costs The number of competitors is increasing and/or they are becoming more equal in size & competitive strength The diversity of competitors is increasing High exit barriers keep firms from exiting the industry TERM 34
What is the payoff of a good scouting
report
DEFINITION 34 Having good info about the strategic direction and likely moves of key competitors allows a company to prepare defensive counter-moves, to craft its own strategic moves with some confidence about what market maneuvers to expect from rivals in response, and to exploit any openings that arise from competitors missteps.
