Define Human Resources And Sustained Competitive Terms Flashcards

Resources the assets, capabilities, processes, employee time, information, and knowledge that an organization uses to improve its effectiveness and efficiency and create and sustain competitive advantage. Competitive advantage providing greater value for customers than competitors can. (iTunes store-endless selection) sustainable competitive advantage a competitive advantage that other companies have tried unsuccessfully to duplicate and have for the moment, stopped try to duplicate. Valuable resources a resource that allows companies to improve efficiency and effectiveness. (Sony Walkman used to be valuable until iPod came along!) rare resource a resource that is not controlled or possessed by many competing firms. (iPod introduced, no music player on market used existing hard drive technology in tis design) imperfectly imitable resources a resource that is impossible or extremely costly or difficult for other firms to duplicate. Non-substitutable resources a resource that produces value or competitive advantage and has no equivalent substitutes or replacements. Competitive inertia a reluctance to change strategies or competitive practices that have been successful in the past. (Carrefour-French retail giant; reluctant to change) shadow strategy task force a committee within a company that analyzes the company’s own weaknesses to determine how competitors could exploit them for competitive advantage. Strategic dissonance a discrepancy between a company’s intended strategy and the strategic actions managers take when implementing that strategy. (Toyota; how did a company famed for its quality have so many problems in 2008) situational (SWOT) analysis an assessment of the strengths and weaknesses in an organizations internal environment and the opportunities and threats in its external environment. (helps a company determine how to increase internal strengths and minimize internal weaknesses while maximizing external opportunities and minimizing external threats) distinctive competence what a company can make do or perform better than its competitors (Honda and Subaru cars are tops in quality and reliability) core capabilities the internal decision making routines, problem solving processes and organizational cultures that determine how efficiently inputs can be turned into outputs. strategic group a group of companies within an industry against which top managers compare, evaluate, and benchmark strategic threats and opportunities. (home depot compares asses strategic threats and opportunities by comparing their company to a strategic group consisting of other home improvement supply companies like Lowe’s and Ace Hardware.) core firms the central companies in a strategic group (the more important group that firms focus on in strategic groups; for example home depot focuses more on Lowe’s) secondary firms the firms in a strategic group that follow strategies related to but somewhat different from those of the core firms. (84 lumber more accessible to contractor while home depot more accessible to average customer) strategic reference points the strategic targets managers use to measure whether a firm had developed the core competencies it needs to achieve a sustainable competitive advantage. (if a hotel competes on quality and service then top management will track the success of this strategy through customer surveys or published hotel ratings) corporate level strategy the overall organizational strategy that addresses the question “what business or businesses are we in or should we be in?” diversification a strategy for reducing risk by buying a variety of items (stocks or in the case of a corporation types of businesses) so that the failure of one stock or one business does not doom the entire portfolio. Portfolio strategy a corporate level strategy that minimizes risk by diversifying investment among various businesses or product lines. (3M makes 55,000 different products for seven different business sectors) acquisition the purchase of a company by another compa unrelated diversification creating or acquiring companies in completely unrelated businesses BCG matrix a portfolio strategy developed by the Boston Consulting Group, that categorized a corporations businesses by growth rate and relative market share and helps managers decide how to invest corporate funds Stars a company with a large share of a fast growing market Question mark a company with a small share of a fast growing market (risky) Cash cow a company with a large share of a slow growing market. (highly profitable) Dog a company with a small share of a slow growing market (not often profitable) Related diversification creating or acquiring companies that share similar products, manufacturing, marketing, technology, or cultures. (Hormel foods both manufactures and markets a variety of foods) grand strategy a broad corporate level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use (growth, stability and retrenchment/recovery) growth strategy a strategy that focuses on increasing profits revenues market share or the number of places in which the company does business stability strategy a strategy that focuses on improving the way in which the company sells the same products or services to the same customers retrenchment strategy a strategy that focuses on turning around very poor company performance by shrinking the size or scope of the business recovery -the strategic actions taken after retrenchment to return to a growth strategy industry level strategy a corporate strategy that addresses the question “how should we compete in this industry?” character of the rivalry- a measure of the intensity of competitive behavior between companies in an industry. Threat of new entrants a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry Threat of substitute products or services a measure of the ease with which customers can find substitutes for an industry’s products or services Bargaining power of suppliers a measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs. Bargaining power of buyers a measure of the influence that customers have on a firms prices Bargaining power of buyers a measure of the influence that customers have on a firms prices Bargaining power of buyers a measure of the influence that customers have on a firms prices Cost leadership the positioning strategy of producing a product or service of acceptable quality at consistently lower production costs than competitors can, so that the firm can offer the product or service at the lowest price in the industry Differentiation the positioning strategy of providing a product or service that is sufficiently different from competitors offerings that customers are willing to pay a premium price for it. Focus strategy the positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited specially targeted group of customers in a particular geographic region or market segment (think romance novels, in the dying publishing industry) Defenders companies using an adaptive strategy aimed at defending strategic positions by seeking moderate, steady growth and by offering a limited range of high quality products and services to a well defined set of customers (Broadview (brink’s) Security) prospectors companies using an adaptive strategy that seeks fast growth by searching for new market opportunities, encouraging risk taking and being the first to bring innovative new products to market. Analyzers- companies using an adaptive strategy that seeks to minimize risk and maximize profits by following or imitating the proven successes of prospectors Reactors companies that do not follow a consistent adaptive strategy, but instead react to changes in the external environment after they occur. (poorer performers) firm level strategy a corporate strategy that addresses the question “how should we compete against a particular firm?” direct competition the rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each others strategic actions market commonality the degree to which two companies have overlapping products, services, or customers in multiple markets. Resource similarity the extent to which a competitor has similar amounts and kinds of resources. Attack a competitive move designed to reduce a rival’s market share or profits. Response a competitive countermove, prompted by a rival’s attack to defend or improve a company’s market share or profit. Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or manufacturing plants, or closing or selling entire lines of products or services would be characteristic of a ____ strategy. retrenchment When Coca-Cola acquired a water-treatment and bottling plant so it could produce and market Dasani brand bottled water, it was an example of ____. external growth...NOT INTERNAL ____ is the measure of the intensity of competitive behavior between companies in an industry. character of rivalry Companies that succeed are often constantly re-examining strategies or competitive practices that have been successful in the past in order to ascertain their probable future success. Tor F false From a competitive standpoint, ____ means that the strategic actions your company takes can probably be matched by your direct competitors. resource similarity In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. If ICI is successful in making the needed changes, it will more than likely implement a ____ strategy. recovery When doing an analysis of strategic groups to assess external environmental threats and opportunities, ____ firms are firms that use related but somewhat different strategies than ____ firms. secondary; core There are four conditions that must be met if a firm's resources are to be used to achieve a sustainable competitive advantage. The resources must be valuable, rare, imperfectly imitable, and nonsubstitutable. Tor F true The Rolling Stones are the most successful act in the music industry largely because they run the band as a business—the Rolling Stones, Inc. Since 1989 (the beginning of the modern age of the Rolling Stone), the band has generated more than $1.5 billion in gross revenues. That total includes sales of records, song rights, merchandising, sponsorship money, and touring. Unlike some other groups, the Stones carry no anti-business baggage. The Rolling Stones, Inc. operates on a combustible mix of talent and intense labor—the product of four decades of trial and error. The company licenses over 50 products from underwear to formalwear. The Voodoo Lounge tour in 1994 grossed $121.2 million, record earnings for a single tour. Over the past decade, the group’s song writing has made about $56 million. The next time you see Mick Jagger, think of him as the highly successful CEO of a mid-sized corporation. The goal of the corporation is to continue providing products that differ from its competitors’ offerings so that fans will continue to pay a premium price for what it sells. Refer to The Rolling Stones. Because other music groups cannot duplicate the value the Rolling Stones are providing to customers, the band can be said to have a(n) ____. sustainable competitive advantage An industry-level strategy that is best suited to changes in the organization's external environment is a(n)____. adaptive...NOT GROWTH