Strategic Management Chapters 1-5
1. Strategic management: An integrative management field that combines analysis, formulation, and implementation in
the quest for competitive advantage.
Never ending cycle of analysis, formulation, implementation, and feedback.
2. Competitive advantage: Superior performance relative to other competitors in the same industry or the industry
average.
A firm that formulates and implements a strategy that leads to superior performance relative to competitors has this.
3. Sustainable competitive advantage: Outperforming competitors or the industry average over a prolonged period of
time.
4. Competitive disadvantage: Under performance relative to other competitors in the same industry or the industry average
5. Competitive parity: Performance of two or more firms at the same level.
6. Strategy: The goal-directed actions a firm intends to take in its quest to gain and sustain competitive advantages.
Manager's "theory" about how to gain and sustain.
7. Strategic positioning: Staking out a unique position in an industry that allows the firm to provide value to customers while
controlling costs.
8. Co-opetition: Cooperation by competitors to achieve a strategic objective.
9. Firm effects: The results of managers' actions to influence firm performance.
Have stronger effect on the firm.
10. Industry effects: The results attributed to the choice of industry in which to compete.
11. Corporate-level strategy: Involves decisions made at the highest level of the firm about where to compete. Which
industries, markets, and geographies their company should compete, and how well they can create synergies across different
business units.
12. Business-level strategy: Involves deciding how to compete in order to achieve superior performance within the
business unit. Formulated by general managers.
13. Functional-level strategy: Involves deciding how to implement the business-level strategy. Functional managers within a
single functional area (accounting, HR, finance, IT, customer service) are responsible for decisions and actions.
14. Strategic business unit (SBU): Standalone division of a larger conglomerate, with its own profits and losses.
15 Business model: The translation of the strategy into action takes place here, and it details the firm's competitive tactics and
initiatives. How the firm intends to make money.
16. Network effects: The increase in value of a product of service as more people use it.
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, Strategic Management Chapters 1-5
17. Bottom of the pyramid: The largest but poorest socioeconomic group of the world's population. Can yield significant
business opportunities.
18. Externalities: Side-effects of production and consumption that are not reflected in the price of a product.
19. Crowdsourcing: A process in which a group of people voluntarily performs tasks that were traditionally completed by a
firm's employees.
Threadless T-shirt company used this.
20. Stakeholders: Individuals or groups who can affect of are affected by the actions of a firm.
21. AFI strategy framework: A model that links three interdependent strategic management tasks that together help firms
conceive and implement a strategy that can improve performance and result in a CA.
22. Strategic management process: Method by which mangers conceive of and implement a strategy that can lead to a
sustainable CA.
Vision, mission, values.
23. Vision: A statement about what the firm ultimately wants to accomplish, it captures the company's aspiration. Helps
employees find meaning in their work.
24. Strategic intent: The staking out of a desired leadership position that far exceeds a company's currents resources and
capabilities. Allows managers to operationalize their visions because it is not only forward-looking and future-oriented but also
helps in ID'ing steps that need to be taken to make a vision become reality.
"Stretch Goals"
25. Mission: Description of what an organization actually does (what its business is) and why it does it. Can be customer or
product oriented.
26. Strategic commitments: Actions that back up a firm's mission statement. They are costly, long-term oriented, and
difficult to reverse.
27. Organizational values: Ethical standards and norms that govern the behavior of the individuals within a firm or
organization. Must form solid foundation to build mission and long term success, as well as help the company stay on track when
pursuing its mission in its quest for a CA.
28 Strategic (long-range) Planning: A rational, top-down process through which executives can program future success.
Concentrates strategic intelligence and decision-making responsibility in the offices of the CEO.
29. Scenario planning: Strategy-planning activity in which managers envision different what-if scenarios to anticipate
plausible futures.
30. Dominant strategic plan: The strategic option that managers think most closely matches a reality at a given point in
time.
31. Strategic initiative: Any activity a firm pursues to explore and develop new products and processes, new markets, or new
ventures.
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1. Strategic management: An integrative management field that combines analysis, formulation, and implementation in
the quest for competitive advantage.
Never ending cycle of analysis, formulation, implementation, and feedback.
2. Competitive advantage: Superior performance relative to other competitors in the same industry or the industry
average.
A firm that formulates and implements a strategy that leads to superior performance relative to competitors has this.
3. Sustainable competitive advantage: Outperforming competitors or the industry average over a prolonged period of
time.
4. Competitive disadvantage: Under performance relative to other competitors in the same industry or the industry average
5. Competitive parity: Performance of two or more firms at the same level.
6. Strategy: The goal-directed actions a firm intends to take in its quest to gain and sustain competitive advantages.
Manager's "theory" about how to gain and sustain.
7. Strategic positioning: Staking out a unique position in an industry that allows the firm to provide value to customers while
controlling costs.
8. Co-opetition: Cooperation by competitors to achieve a strategic objective.
9. Firm effects: The results of managers' actions to influence firm performance.
Have stronger effect on the firm.
10. Industry effects: The results attributed to the choice of industry in which to compete.
11. Corporate-level strategy: Involves decisions made at the highest level of the firm about where to compete. Which
industries, markets, and geographies their company should compete, and how well they can create synergies across different
business units.
12. Business-level strategy: Involves deciding how to compete in order to achieve superior performance within the
business unit. Formulated by general managers.
13. Functional-level strategy: Involves deciding how to implement the business-level strategy. Functional managers within a
single functional area (accounting, HR, finance, IT, customer service) are responsible for decisions and actions.
14. Strategic business unit (SBU): Standalone division of a larger conglomerate, with its own profits and losses.
15 Business model: The translation of the strategy into action takes place here, and it details the firm's competitive tactics and
initiatives. How the firm intends to make money.
16. Network effects: The increase in value of a product of service as more people use it.
1/5
, Strategic Management Chapters 1-5
17. Bottom of the pyramid: The largest but poorest socioeconomic group of the world's population. Can yield significant
business opportunities.
18. Externalities: Side-effects of production and consumption that are not reflected in the price of a product.
19. Crowdsourcing: A process in which a group of people voluntarily performs tasks that were traditionally completed by a
firm's employees.
Threadless T-shirt company used this.
20. Stakeholders: Individuals or groups who can affect of are affected by the actions of a firm.
21. AFI strategy framework: A model that links three interdependent strategic management tasks that together help firms
conceive and implement a strategy that can improve performance and result in a CA.
22. Strategic management process: Method by which mangers conceive of and implement a strategy that can lead to a
sustainable CA.
Vision, mission, values.
23. Vision: A statement about what the firm ultimately wants to accomplish, it captures the company's aspiration. Helps
employees find meaning in their work.
24. Strategic intent: The staking out of a desired leadership position that far exceeds a company's currents resources and
capabilities. Allows managers to operationalize their visions because it is not only forward-looking and future-oriented but also
helps in ID'ing steps that need to be taken to make a vision become reality.
"Stretch Goals"
25. Mission: Description of what an organization actually does (what its business is) and why it does it. Can be customer or
product oriented.
26. Strategic commitments: Actions that back up a firm's mission statement. They are costly, long-term oriented, and
difficult to reverse.
27. Organizational values: Ethical standards and norms that govern the behavior of the individuals within a firm or
organization. Must form solid foundation to build mission and long term success, as well as help the company stay on track when
pursuing its mission in its quest for a CA.
28 Strategic (long-range) Planning: A rational, top-down process through which executives can program future success.
Concentrates strategic intelligence and decision-making responsibility in the offices of the CEO.
29. Scenario planning: Strategy-planning activity in which managers envision different what-if scenarios to anticipate
plausible futures.
30. Dominant strategic plan: The strategic option that managers think most closely matches a reality at a given point in
time.
31. Strategic initiative: Any activity a firm pursues to explore and develop new products and processes, new markets, or new
ventures.
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