1.

Strategic Leaders

Strategic leaders are located in different parts of the firm using the strategic management
process to help the firm reach its vision and mission.

2. Organizational culture

Organizational culture refers to the complex set of ideologies, symbols, and core values that
are shares throughout the firm and that influence how the firm conducts business.

3. Strategic competitiveness

Strategic competitiveness is achieved when a firm successfully formulates and

implements a value- creating strategy.

4. Strategy
Strategy is an integrated and coordinated set of commitments and actions designed to
exploit core competencies and gain a competitive advantage.
5. Competitive advantage
A firm has a competitive advantage when it implements a strategy competitors are
unable to duplicate or find too costly to try to imitate.
6. Average returns
Average returns are returns equal to those an investor expects to earn from other
investments with a similar amount of risk.
7. Strategic management process
The Strategic management process is the full set of commitments, decisions, and actions
required for a firm to achieve strategic competitiveness and earn above- average returns.
8. Global economy
A global economy is one in which goods, services, people, skills, and ideas move freely
across geographic borders.
9. Strategic flexibility
Strategic flexibility is a set of capabilities existing in a dynamic and uncertain
competitive environment.

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 10. Above-average returns
Above-average returns are returns in excess of what an investor expects to earn from
other investments with a similar amount of risk.
11. Risk
Risk is an investor’s uncertainty about the economic gains or losses that will result
from a particular investment.
12. Resources
Resources are inputs into a firm’s production process, such as capital equipment, the
skills of individual employees, patents, finances, and talented managers.
13. Capability
A capability is the capacity for a set of resources to perform a task or an activity in an
integrative manner.
14. Core competencies
Core competencies are capabilities that serve as a source of competitive advantage for
a firm over its rivals.
15. Vision
Vision is a picture of what the firm wants t be and, in broad terms, what it wants to
ultimately achieve.
16. Mission
A mission specifies the business or businesses in which the firm intends to compete and
the customers it intends to serve.
17. Stakeholders
Stakeholders are the individuals and groups who can affect the firm’s vision and mission,
are affected by the strategic outcomes achieved, and have enforceable claims on the firm’s
performance.
18. Profit pool
A profit pool entails the total profits earned in an industry at all points along the value
chain.
19. Industry
An industry is a group of firms producing products that are close substitutes.

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 20. Opportunity
An opportunity is a condition in the general environment that if exploited effectively,
helps a company achieve strategic competitiveness.
21. Threat
A threat is a condition in the general environment that may hinder a company’s efforts
to achieve strategic competitiveness.
22. Industry environment
The industry environment is the set of factors that directly influences a firm and its
competitive actions and competitive responses: the threat of new entrants, the power of
suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry
among competitors,.
23. Demographic segment
The demographic segment is concerned with a population’s size, age structure,
geographic distribution, ethnic mix, and income distribution.
24. Economic environment
The economic environment refers to the nature and direction of the economy in which a
firm competes or may compete.
25. Political/legal segment
The political/legal segment is the arena in which organizations and interest groups
compete for attention, resources, and a voice in overseeing the body of laws and regulations
guiding interactions among nations as well as between firms and various local
governmental agencies.
26. Sociocultural segment
The sociocultural segment is concerned with a society’s attitudes and cultural values.
27. Technological segment
A technological segment includes the institutions and activities involved with creating
new knowledge and translating that knowledge into new outputs, products, processes, and
materials.

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 28. Physical environment segment
The Physical environment segment refers to potential and actual changes in the physical
environment and business practices that are intended to positively respond to and deal with
those changes.
29. Strategic group
A strategic group is a set of firms emphasizing similar strategic dimensions to use a
similar strategy.
30. Competitor intelligence
Competitor intelligence is the set of data and information the firm gathers to better
understand and better anticipate competitor’s objectives, strategies, assumptions, and
capabilities.
31. Complementors
Complementors are companies or networks of companies that sell complementary goods
or services that are compatible with the focal firm’s goods or service.
32. Global segment
The global segment includes relevant new global markets, existing markets that are
changing, important international political events, and critical cultural and institutional
characteristics of global markets.
33. General environment
The general environment is composed of dimensions in the broader society that
influence an industry and the firms within it.
34. Valuable capabilities
Valuable capabilities allow the firm to exploit opportunities or neutralize threats in its
external environment.
35. Rare capabilities
Rare capabilities are capabilities that few, if any, competitors possess.
36. Costly-to-imitate
Costly-to-imitate capabilities are capabilities that other firms cannot easily develop.
37. Non-substitutable capabilities
Non-substitutable capabilities are capabilities that do not have strategic equivalents.

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 38. Primary activities
Primary activities are involved with a product’s physical creation, its sale and
distribution to buyers, and its service after the sale.
39. Support activities
Support activities provide the assistance necessary for the primary activities to take
place.
40. Global mind-set
A global mind-set is the ability to analyze, understand and manage an internal
organization in ways that are not dependent on the assumptions of a single country, culture,
or context.
41. Tangible resources
Tangible resources are assets that can be observed and quantified.
42. Intangible resources
Intangible resources include assets that are rooted deeply in the firm’s history,
accumulate over time, and are relatively difficult for competitors to analyze and imitate.
43. Value
Value is measured by a product’s performance characteristics and by its attributes for
which customers are willing to pay.
44. Outsourcing
Outsourcing is the purchase of a value-creating activity from an external supplier.
45. Business-level strategy
A business-level strategy is an integrated and coordinated set f commitments and
actions the firm uses to gain a competitive advantage by exploiting core competencies in
specific product markets.
46. Differentiation strategy
The differentiation strategy is an integrated set of actions taken to produce goods or
services (at an acceptable cost) that customers perceive as being different in ways that are
important to them.
47. Focus strategy
The focus strategy is an integrated set of actions taken to produce goods or services that
serve the needs of a particular competitive segment.

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 48. Integrated cost leadership/differentiation strategy
Integrated cost leadership/differentiation strategy involves engaging in primary and
support activities that allow a firm to simultaneously pursue low cost and differentiation.
49. Market segmentation
Market segmentation is a process used to cluster people with similar needs into
individual and identifiable groups.
50. Cost leadership strategy
A cost leadership strategy is an integrated set of actions taken to produce goods or
services with features that are acceptable ot customers at the lowest cost, relative to that of
competitors.
51. Total quality management (TQM)
Total quality management is a managerial innovation that emphasizes an organization’s
total commitment to the customer and to continuous improvement of every process through
the use of data-driven, problem-solving approaches based on empowerment of employee
groups and teams.
52. Competitors
Competitors are firms operating the same market, offering similar products, and
targeting similar customers.
53. Competitive rivalry
Competitive rivalry is the ongoing set of competitive actions and competitive responses
that occur among firms as they maneuver for an advantageous market position.
54. Competitive behavior
Competitive behavior is the set of competitive actions and competitive responses the
firm takes to build or defend its competitive advantages and to improve its market position.
55. Multimarket competition
Multimarket competition occurs when firms compete against each other in several
product or geographic markets.
56. Competitive dynamics
Competitive dynamics refer to all competitive behaviors- that is, the total set of actions
and responses taken by all firms competing within a market.

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 57. First mover
A first mover is a firm that takes an initial competitive action in order to build or defend
its competitive advantages or to improve its market position.
58. Second mover
A second mover is a firm that responds to the first mover’s competitive action, typically
through imitation.
59. Late mover
A late mover is firm that responds to a competitive action a significant amount of time
after the first mover’s action and the second mover’s response.
60. Market commonality
Market commonality is concerned with the number of markets with which the firm and
a competitor are jointly involved and the degree of importance of the individual markets to
each.
61. Resource similarity
Resource similarity is the extent to which the firm’s tangible and intangible resources are
comparable to a competitor’s in terms of both type and amount.
62. Competitive action
A competitive action is a strategic or tactical action the firm takes to build or defend its
competitive advantages or improve its market position.
63. Competitive response
A competitive response is a strategic or tactical action the firm takes to counter the
effects of a competitor’s competitive action.
64. Strategic action or strategic response
A strategic action or a strategic response is a market-based move that involves a
significant commitment of organizational resources and is difficult to implement and
reverse.
65. Tactical action or tactical response
A tactical action or a tactical response is a market-based move that is taken to fine-tune
a strategy; it involves fewer resources and is relatively easy to implement and reverse.
66. Quality
Quality exists when the firm’s goods or services meet or exceed customer’s expectations.

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 67. Slow-cycle markets
Slow-cycle markets are those in which the firm’s competitive advantages are shielded
form imitation commonly for long periods of time and where imitation is costly.
68. Fast-cycle markets
Fast-cycle markets are markets in which the firm’s capabilities that contribute to
competitive advantages aren’t shielded form imitation and where imitation is often rapid
and inexpensive.
69. Standard-cycle markets
Standard-cycle markets are markets in which the firm’s competitive advantages are
moderately shielded from imitation and where imitation is moderately costly.
70. Corporate-level strategy
Corporate-level strategy specifies actions a firm takes to gain a competitive advantage
by selecting and managing a group of different businesses competing in different product
markets.
71. Economies of scope
Economies of scope are cost savings that the firm creates by successfully sharing some
of its resources and capabilities or transferring one or more corporate-level core
competencies that were developed in one of its businesses to another of its businesses.
72. Corporate-level core competencies
Corporate-level core competencies are complex sets of resources and capabilities that
link different businesses, primarily through managerial and technological knowledge,
experience, and expertise.
73. Market power
Market power exists when a firm is able ot sell its products above the existing
competitive level or to reduce the costs of its primary and support activities below the
competitive level, or both.

74. Multipoint competition

Multipoint completion exists when two or more diversified firms simultaneously
compete in the same product areas or geographical markets.

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 75. Vertical integration
Vertical integration exists when a company produces its own inputs (backward
integration) or owns its own source of output distribution (forward integration).
76. Financial economies
Financial economies are cost savings realized through improved allocations of
financial resources based on investments inside or outside the firm.
77. Synergy
Synergy exists when the value created by business units working together exceeds the
value that those same units create working independently.

79. Merger:

A Merger is a strategy through which two firms agree to integrate their operations on a
relatively coequal basis.

80. Acquisition:

An Acquisition is a strategy through which one firm buys a controlling or 100%, interest
in another firm with the intent of making the acquired firm a subsidiary business within its
portfolio.

81. Takeover:

A Takeover is a special type of acquisition wherein the target firm does not solicit the
acquiring firm’s bid; takeovers are unfriendly acquisitions.

82. Restructuring:

Restructuring is a strategy through which a firm changes its set of business or its financial
structure.

83. Global Strategy:

A Global Strategy is an international strategy through which the firm offers standardized
products across country markets, with competitive strategy being dictated by the home
office.

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 84. Multidomestic Strategy:

A Multidomestic Strategy is an international strategy in which strategic and operating

decisions are decentralized to the strategic business unit in each country so as to allow that
unit to tailor products to the local market.

85. Transitional Strategy:

A Transitional Strategy is an international strategy through which the firm seeks to achieve
both global efficiency and local responsiveness.

86. Greenfield Venture:

The establishment of a new wholly owned subsidiary is referred to as a Greenfield venture.

87. International Diversification:

International diversification is a strategy through which a firm expands the sales of its
goods or services across the borders of global region and countries into different geographic
locations or markets.

88. International Strategy:

An International Strategy is a strategy though which the firm sells its goods and services
outside its domestic markets.

89. Cooperative Strategy:

A Cooperative Strategy in which firms work together to achieve a shared objective.

90. Strategic Alliance:

A Strategic Alliance is a cooperative strategy in which firms combine some of their

resources and capabilities to create a competitive advantage.

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 91. Joint Venture:

A Joint Venture is a strategic alliance in which two or more firms create a legally
independent company to share some of their resource and capabilities to develop a
competitive advantage.

92. Equity Strategic Alliance:

An Equity Strategic Alliance is an alliance in which two or more firms own different
percentages of the company they have formed by combining some of their resources and
capabilities to create a competitive advantage.

93. Non-Equity Strategic Alliance:

A Non-Equity Strategic Alliance is an alliance in which two or more firms develop a

contractual relationship to share some of their unique resources and capabilities to create a
competitive advantage.

94. Business-Level Cooperative Strategy:

A firm uses Business-Level Cooperative Strategy to grow and improve its performance in
individual product market.

95. Complementary Strategic Alliance:

Complementary Strategic Alliance are business level alliance in which firms share some
of their resources and capabilities in complementary ways to develop competitive
advantages.

96. Corporate Level Strategic Alliance:

A firm uses a Corporate Level Strategic Alliance to help it diversify in terms of product
offered or market served, or both.

97. Diversifying Strategic Alliance:

A Diversifying Strategic Alliance is a corporate level cooperative strategy in which firms

share some of their resources and capabilities to diversify into new product or market areas.

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 98. Synergistic Strategic Alliance:

A Synergistic Strategic Alliance is a corporate level cooperative strategy in which firms

share some of their resources and capabilities to create economics of scope.

99. Franchising:

Franchising is a corporate level cooperative strategy in which a firm( the franchisor) uses
a franchisee as a contractual relationship to describe and control the sharing of its resources
and capabilities with partners( the franchisee).

100. Cross Border Strategic Alliance:

A Cross Border Strategic Alliance is an international cooperative in which the firms with
headquarters in different nations decide to combine some of their resources and capabilities
to create a competitive advantage.

101. Network Cooperative Strategy:

A Network Cooperative Strategy is a cooperative strategy where in several firms agree to

form multiple partnership to achieve shared objectives.

102. Organizational Structure:

Organizational Structure specifies the firm’s formal reporting relationships, procedures,

controls, and authority and decision making processes.

103. Organizational Controls:

Organizational Controls guide the use of strategy, indicate how to compare actual results
with expected results, and suggest corrective actions to take when the difference is
unacceptable.

104. Strategic Controls:

Strategic Controls are largely subjective criteria intended to verify that the firm is using
appropriate strategies for the conditions in the external environment and the company’s
competitive advantages.

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 105. Financial Controls:

Financial Controls are largely subjective criteria to measure the firm’s performance against
previously established quantitative standards.

106. Multidivisional (M- form) Structure:

It consists of a corporate office and operating divisions, each operating division

representing a separate business or profit center in which the top corporate officers
delegates responsibilities for day-to-day operations and business unit strategy to division
managers.

107. Simple Structure:

The Simple Structure is a structure in which the owner manager makes all the major
decisions and monitors all activities while the staff serves as an extension of the manager’s
supervisory authority.

108. Functional Structure:

The Functional Structure consists of chief executive officer and a limited corporate staff,
with functional managers in dominant organizational areas such as production, accounting,
marketing, R&D, engineering and human resources.

109. Competitive Form:

The Competitive Form is an M- from structure characterized by complete independence

among the firm’s division which compete for corporate resource.

110. Worldwide Geographic Area Structure:

The Worldwide Geographic Area Structure emphasize the national interests and facilitates
the firm’s efforts to satisfy the local differences.

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 111. Worldwide Product Divisional Structure:

In the Worldwide Product Divisional Structure, the decision making authority is centralized
in the worldwide division headquarters to coordinate and integrate decisions and actions
among divisional business unit.

112. Combination Structure:

The Combination Structure is a structure drawing characteristics and mechanism from both
the worldwide geographic area structure and the worldwide product divisional structure.

113. Cooperative Form:

The Cooperative Form is an M-form structure in which horizontal integration is used to

bring about interdivisional cooperation.

114. Strategic Business Unit Form (SBU):

The Strategic Business Unit Form is an M-form consisting of three levels: corporate
headquarters, strategic business units (SBU), and SUB divisions.

115. Strategic Leadership:

Strategic Leadership is the ability to anticipate, envision, maintain flexibility and empower
others to create strategic change as necessary.

116. Internal Managerial Labour Market:

An Internal Managerial Labour Market consists of firm’s opportunities for managerial

positions and the qualified employees within that firm.

117. External Managerial Labour Market:

An External Managerial Labour Market is the collection of managerial career opportunities

and the qualified people who are external to the organization in which the opportunities
exist.

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 118. Organizational Culture:

An Organizational Culture consists of complex set of ideologies, symbols and core values
that are shared throughout the firm and influence the way business is conducted.

119. Top Management Team:

The Top Management Team is composed of the key individuals who are responsible for
selecting and implementing the firm’s strategies.

120. Heterogeneous Top Management Team:

A Heterogeneous Top Management Team is composed of individual with different

functional backgrounds, experience and education.

121. Balanced Scorecard:

The Balanced Scorecard is a framework firms can use to verify that they have established
both strategic and financial controls to assess their performance.

123. Human Capital:

Human Capital refers to knowledge and skills of the firm’s entire workforce.

124. Determining Strategic Direction:

Determining Strategic Direction involves specifying the image and character the firm seeks
to develop over time.

125. Social Capital:

Social Capital involves relationship inside and outside the firm that helps the firm
accomplish tasks and create value for customers and shareholders.

126. Entrepreneurship:

Entrepreneurship is the process by which individuals, teams or organization identify and

purse entrepreneurial opportunities without being immediately constrained by the resources
they currently control.

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 127. Entrepreneurial Opportunities:

Entrepreneurial Opportunities are conditions in which new goods or services can satisfy
the need of the market.

128. Strategic Entrepreneurship:

Strategic Entrepreneurship is taking entrepreneurial actions using a strategic perspective.

129. Corporation Entrepreneurship:

Corporation Entrepreneurship is the use or application of entrepreneurship within an

established firm.

130. Invention:

Invention is the act of creating or developing a new product or process.

131. Innovation:

Innovation is the process of creating a commercial product from an invention.

132. Imitation:

Imitation is the adoption of similar innovation by different firms.

133. Entrepreneurs:

Entrepreneurs are individuals, acting independently or as part of an organization, who

perceive an entrepreneurial opportunity and then take risk to develop an innovation to
exploit it.

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 134. Entrepreneurial Mindset:

The person with an Entrepreneurial Mindset values uncertainty in the marketplace and seek
to continuously identify opportunities with the potential to lead to important innovations.

135. International Entrepreneurship:

International Entrepreneurship is the process in which firms creatively discover and exploit
opportunities that are outside their domestic market in order to develop a competitive
advantage.

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