451 key terms exam 1

451 key terms exam 1 - Glossary Chapter 1 Above-average...

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Glossary Chapter 1 Above-average returns Average returns capability A capability is the capacity for a set of resources to perform a task or an activity in an integrative manner. competitive advantage Core competencies Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals. global economy A global economy is one in which goods, services, people, skills, and ideas move freely across geographic borders. mission Organizational culture profit pool A profit pool entails the total profits earned in an industry at all points along the value chain. Resources Risk Risk is an investor's uncertainty about the economic gains or losses that will result from a particular investment. Stakeholders Strategic competitiveness Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy. Strategic flexibility Strategic leaders strategic management process strategy Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk. Average returns are returns equal to those an investor expects to earn from other investments with a similar amount of risk. A firm has a competitive advantage when it implements a strategy competitors are unable to duplicate or find too costly to try to imitate. A mission specifies the business or businesses in which the firm intends to compete and the customers it intends to serve. Organizational culture refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business. Resources are inputs into a firm's production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers. Stakeholders are the individuals and groups who can affect, and are affected by, the strategic outcomes achieved and who have enforceable claims on a firm's performance. Strategic flexibility is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment. Strategic leaders are people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission. 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. A strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.
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Vision Vision is a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve.
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