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32 Cards in this Set
- Front
- Back
Setof related actions that managers take to increase their company’s performance. |
Strategy |
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Creatingcompetitive advantage through effective management of the strategy-makingprocess.
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Strategic leadership |
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Selectingstrategies based on analysis of an organization’s external and internalenvironment. |
Strategy formulation |
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Putting strategies into action. |
Strategy implementatio |
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Equitycapital for which there is no guarantee that stockholders will: -recouptheir investment -earna decent return. |
Risk capital |
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Thereturns that shareholders earn from purchasing shares in a company. |
Shareholder value |
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Sources of shareholder value: |
-Capitalappreciation in the value of a company’s shares -Dividendpayments |
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Thereturn a company makes on the capital invested in the enterprise. |
Profitability |
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Netprofit over the capital invested in a firm. |
Return on invested capital (ROIC) |
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Profit growth -Theincrease in net profit over time, achieved by: |
1. sellingproducts in rapidly growing markets. 2. gainingmarket share from rivals. 3. sellingmore to existing customers. 4.expandingoverseas or diversifying into new businesses. |
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Toboost profitability and profit growth, managers must: |
1. usestrategies to give their company a competitive advantage over rivals. 2.deliverhigh profitability and sustainable profit growth. |
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Occurswhen a company’s profitability is greater than the average profitability offirms in its industry. |
Competitive advantage
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A company’s strategies that enableit to maintain above-average profitability for a number of years. |
Sustained competitive advantage |
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Conceptionof how strategies should work together as a whole to enable the company toachieve competitive advantage. |
BUSINESS MODEL |
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Bear responsibilityfor a company’s overall performance or for one of its major self-containedsubunits or divisions. |
General managers |
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Responsible forsupervising a particular function, task, activity, or operation. |
Functional managers |
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Competes in severaldifferent businesses and has a separate self-contained division to manage each. |
Multidivisional company |
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Corporate-level managers: |
1. Oversee the development of strategies for the entire organization. 2. Provide a link between people concerned with the firm’s strategicdevelopment and the shareholders. 3. Ensure that business strategies pursued by the company are consistentwith maximizing profitability and profit growth. |
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Purpose of thecompany, or a statement of what the company strives to do. |
Mission |
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Articulation of a company's desired achievements or future state. |
Vision |
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Statement of how employees should conduct themselves and their business to help achieve the company mission. |
Values |
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Precise and measurable desired state that a company attempts to realize. |
Goals |
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____________ identifies strategic opportunities and threats that will affect how anorganization pursues its mission. |
Externalanalysis |
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Externalanalysis involves analysis of: |
1. industryenvironment in which the company operates. 2. countryor national environment. 3. macroenvironment. |
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_________ focuses on reviewing the resources, capabilities, and competencies ofa company. |
Internalanalysis |
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_______identify the company’s strengths and weaknesses. |
Goals |
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If a companies strategies result in superior performance, it is said to have _________ |
a competitive advantage. |
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To increase shareholders value, managers must pursue strategies that increase the ________ and _________. |
1. profitability of the company 2. ensure the profits grow |
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Maximizing _________ is the ultimate goal of profit making companies |
shareholder value |
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The higher a companies profitability and profit growth relative to its competitors, the _________. |
greater their competitive advantage will be. |
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The profitability and growth of a company are determined by two main factors: |
1. its relative success in its industry 2. the overall performance of its industry relative to other industries. |
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General managers have _____ responsibility |
profit and loss responsibility for a product, a business, or the whole company. |