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Encyclopedia Strategic Management (255 Terms) Management Topic
Keyword
Definition
A
Strategic Management
Accountability
This means telling people about how effective your individuals or teams are at delivering services. Usually, this means providing information (giving an account of your performance), and being held to account
A
Strategic Management
Action plans
These are sets of actions (usually written down) that help you to get results. A good action plan covers who will do what, and when they will do it; what resources they will use; and how you will judge their success.
A
Strategic Management
Agency theory
A theory that deals with the use of financial incentives to motivate workers.
A
Strategic Management
Aim
An aim or a vision is a 'high-level statement of broad intent' or a summary of overall objectives. It is a statement that 'embraces the desired future that the organisation is working towards. It doesn't have to be measurable; it should just quickly outline what you are trying to do.
A
Strategic Management
Appraisal and staff development
Appraisals are usually used in terms of staff management. They are regular reviews of individual or team performances and are used to monitor achievement of targets and to agree new targets. Appraisals may be linked to pay. It is the people themselves who improve performance, not systems or processes, so performance management needs to include appraisal and staff development.
A
Strategic Management
AttractivenessStrength Matrix
In the attractiveness-strength matrix, each business's location is plotted using quantitative measures of long-term industry attractiveness and business strength/competitive position.
A to Z
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Encyclopedia Strategic Management (255 Terms)
B
Strategic Management
B2B—Business-toBusiness
A term used to describe e Business applications in which two or more business partners (separate companies) actively collaborate with one another, sharing information to enhance their overall effectiveness; see also B2C, B2E, Collaboration, e Procurement, and Supply Chain Management.
B
Strategic Management
B2C—Business-toCustomer
A term used to describe e Business applications in which a company does business over the internet with its customers by personalizing their web sites and allowing for cross selling and up selling; see also B2B, CRM, Cross Selling, Personalization, and Up Selling.
B
Strategic Management
B2E—Business-toEmployee
A term used to describe intranet portals in which employees are able, through a single point-of-entry, to access their HR records, payroll history, and other corporate information relevant to them as individual employees; see also Portals.
B
Strategic Management
Backward (upstream) Input sources are brought into the firm. integration
B
Strategic Management
Barriers to entry
Factors that reduce or impede entry into an industry.
B
Strategic Management
Barriers to exit
Factors that impede the exit of a firm from an industry.
B
Strategic Management
Baseline
This is a performance figure that you take from a given point in time as a starting point to track your progress or to set future target levels.
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Encyclopedia Strategic Management (255 Terms)
B
Strategic Management
Basket of indicators
This is a collection of indicators that all refer to a particular service. Usually these will form a balanced set. If you are monitoring your whole service or activity you will need more than one indicator, so you would use a 'basket' or group of them to balance cost, quality speed, accuracy and so on.
B
Strategic Management
Benchmarking
Benchmarking has proven to be a potent tool for learning which companies are best at performing particular activities and then utilizing their techniques (or "best practices") to improve the cost and effectiveness of a company's own internal activities.
B
Strategic Management
Benefit drivers
Attributes of a product that form the basis on which a firm can differentiate itself. Attributes can include the characteristics of the product itself, service characteristic, characteristics of product sale or delivery, characteristics that shape consumers’ perceptions and characteristics that affect the subjective image of the product.
B
Strategic Management
Best Value Performance Plans (BVPPs)
These outline authorities' approaches (progress, successes and other issues) to best value and general improvement, including performance information.
B
Strategic Management
Best-Value Frontier
The value-map reference line connecting products that offer the best performance in each price range.
B
Strategic Management
Blockaded entry
A condition where the existing firms in the industry firm need not undertake any entry-deterring strategies to deter entry by outsiders.
B
Strategic Management
Board of Directors
The central role of the board of directors in the strategic management process is (1) to critically appraise and ultimately approve strategic action plans and (2) to evaluate the strategic leadership skills of the CEO and others in line to succeed the incumbent CEO.
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Encyclopedia Strategic Management (255 Terms)
BPI allows for an automated inter-company exchange of processes in an EAI or middleware environment. A business process may be a transaction, application, or component set of related business logic. By adopting BPI within your EAI environment, companys' can streamline operations, decrease application deployment time, reduce costs, and improve customer service.
Strategic Management
BPI - Business Process Integration
B
Strategic Management
Enables business managers to pull and manage data as needed from disparate applications, including enterprise resource planning, customer relationship management and supply chain systems. BPM is the ability to see and control all parts of a BPM - Business long-lived, multi-step information request or transaction that spans multiple applications and people in one or more companies. Process Management BPM means harnessing and enhancing the value of business processes within extended enterprise, no matter who they involve. A BPM solution is a graphical productivity tool for modeling, integrating, monitoring, and optimizing process flows of all sizes, crossing any application , company boundary, or human interaction.
B
Strategic Management
Business Intelligence The art of knowing your customers better than they do themselves.
B
Strategic Management
Business Model
A company's business model deals with whether the revenue-cost-profit economics of its strategy demonstrate the viability of the enterprise as a whole.
B
Strategic Management
Business planning
A plan that determines how a strategic plan will be implemented. It specifies how, when, and where a strategic plan will be put into action. Also known as tactical planning.
B
Strategic Management
Business Strategy
Business strategy concerns the actions and the approaches crafted by management to produce successful performance in one specific line of business; the central business strategy issue is how to build a stronger long-term competitive position.
B
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Encyclopedia Strategic Management (255 Terms)
B
Strategic Management
Buyer power
The ability of individual customers to negotiate purchase prices that extract profits from sellers.
C
Strategic Management
Cash Cow
A cash cow business is a valuable part of a diversified company's business portfolio because it generates cash for financing new acquisitions, funding the capital requirements of cash hogs, and paying dividends.
C
Strategic Management
Cash Hog
A cash hog business is one whose internal cash flows are inadequate to fully fund its needs for working capital and new capital investment.
C
Strategic Management
Collaboration
The process of working jointly between two or more different corporations by sharing information such as the availability of supplies, the inventory of products, their shipment status, forecasts, replenishment schedules, etc.; see also Supply Chain Management and Supply Chain Visibility.
C
Strategic Management
Company Competence
A company competence is the product of learning and experience and represents real proficiency in performing an internal activity.
C
Strategic Management
Competitive advantage
What a firm does better than its competitors. Characteristics that allow a firm to outperform its rivals.
C
Strategic Management
Competitive enterprises
Enterprises for which the output level of one can be increased only by decreasing the output level of the other.
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Encyclopedia Strategic Management (255 Terms)
C
Strategic Management
Competitive strategy How a firm competes within a specific industry or market.
C
Strategic Management
Competitor analysis
The competitive nature of an industry. It determines how a rival will likely react in a given situation.
C
Strategic Management
Complementary enterprise
Enterprises for which increasing the output level of one also increases the output level of the other.
C
Strategic Management
Concentration
Focuses the business’s efforts and resources in one industry.
C
Strategic Management
Concentric diversification
Diversification into a related industry.
C
Strategic Management
Conglomerate diversification
Diversification into an unrelated industry.
C
Strategic Management
Constant returns to scale
The average cost per unit of output remains unchanged as total output increases.
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Encyclopedia Strategic Management (255 Terms)
C
Strategic Management
Consumer surplus
C
Strategic Management
Contestable markets Markets where profits are held to a competitive level. Due to the ease of entry into the market.
C
Strategic Management
Contractual integration
Separate firms in the value chain are linked through contractual arrangements.
C
Strategic Management
Core business
The central or major business of the company. The core business is formed around the core competency of the company. Management of the company’s core business is central to any decision about strategic direction.
C
Strategic Management
Core Competence and Distinctive Competence
A core competence is something that a company does well relative to other internal activities; a distinctive competence is something a company does well relative to competitors.
C
Strategic Management
Corporate Culture
Corporate culture refers to a company's values, beliefs, business principles, traditions, ways of operating, and internal work environment.
C
Strategic Management
Corporate Intrapreneuring
Corporate intrapreneuring relies upon middle and lower-level managers and teams to spot new business opportunities, develop strategic plans to pursue them, and create new businesses.
The consumer’s perceived value or benefit of a product less the product’s purchase price.
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Encyclopedia Strategic Management (255 Terms) C
Strategic Management
Corporate plan
This is a plan that outlines what an organisation as a whole is aiming to achieve and how it intends to get there. It brings together internal plans (such as serviced or team plans), and links them with external or partnership plans (such as community strategies or local strategic partnerships).
C
Strategic Management
Corporate Restructuring
Corporate restructuring involves making radical changes in the composition of the businesses in the company's portfolio.
C
Strategic Management
Corporate Strategy
Corporate strategy concerns how a diversified company intends to establish business positions in different industries and the actions and approaches employed to improve the performance of the group of businesses the company has diversified into.
C
Strategic Management
Cost advantage
One of the major strategies to achieve a competitive advantage; When pursuing a cost advantage, firms seek to attain lower costs while maintaining a perceived benefit that is comparable to competitors.
C
Strategic Management
Cost center
An enterprise that has a manager who is responsible for cost performance and controls most of the factors affecting cost.
C
Strategic Management
Critical success factors
Those few things that must go well if a company is to succeed. Typically 20 percent of the factors determine 80 percent of the performance. The critical success factors represent the 20 percent. Also called key success factors.
Strategic Management
CRM—Customer Relationship Management
A term used to describe an e Business application that enables customers to sell more effectively over the internet, thus reaching more potential customers (also known as enhancing their customer touch points); typical CRM modules include Call Center Automation, Sales Force Automation (forecasting, pipeline review, product availability, contact data bases), Personalization of Web Sites, Cross Selling, and Up Selling; leading CRM vendors include Siebel, Kana, ePiphany, PeopleSoft (through their acquisition of Vantive), SAP, and Broad Vision; see also B2C, Cross Selling, Personalization, and Up Selling.
C
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Encyclopedia Strategic Management (255 Terms) C
Strategic Management
Cross Selling
A term that describes the process of selling related, peripheral items to a customer over the internet; as an example, if a customer is buying a golf club over the internet, the distributor might recommend a set of golf balls to go with that purchase; see also B2C, CRM, Personalization, and Up Selling.
C
Strategic Management
Cross-cutting indicators
These are indicators that measure a service where two or more organisations or teams within an organisation, are jointly responsible for delivery.
C
Strategic Management
Cross-Market Subsidization
Cross-market subsidization-supporting competitive offensives in one market with resources and profits diverted from operations in other markets-is a powerful competitive weapon.
C
Strategic Management
Culture
The collection of beliefs, expectations, and values learned and shared by the company’s members and passed on from one generation to another.
C
Strategic Management
Customer specialization
A targeting strategy in which the firm offers a variety of related products to a particular class of customers.
C
Strategic Management
Customer Surplus
A measure of the value of a particular deal to the customer. Surplus is the difference between the fair price and the price actually paid.. If the price the customer pays is less than a fair price, the surplus is positive; if more than the fair price, negative; if equal to fair price, zero.
Customer Value Management (CVM)
The art and science of measuring, analyzing, and managing value. A product’s relative value is the customer-perceived performance-for-price relative to rival brands. Executives leading product divisions and their teams working in competitive marketing strategy (on product positioning, product improvements, new product development and launches, value propositions, value pricing, branding, marketing communications, value selling, and key account selling) use the techniques and tools for managing customer value to coordinate and execute their strategies to outperform competitors. [See Managing Customer Value by Bradley T. Gale.]
C
Strategic Management
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Encyclopedia Strategic Management (255 Terms)
D
Strategic Management
Deterred entry
Occurs when an existing firm in the industry can keep an outside firm out of the industry by employing an entry-deterring strategy.
D
Strategic Management
Differential Worth
The difference in the worth (economic value) of benefits delivered by one product versus a reference product. It is equivalent to the monetary difference between the two products’ positions on the fair-value line. The reference product can be the average product (in the category or consideration set) or a specific competing product.
D
Strategic Management
Differentiation advantage
Achieving a competitive advantage by seeking to offer a product of higher perceived value while maintaining costs that are comparable to competitors.
D
Strategic Management
Differentiation Strategy
The essence of a differentiation strategy is to be unique in ways that are valuable to customers and that can be sustained.
D
Strategic Management
Diffusion curve
The rate over time at which innovations are copied by rivals.
D
Strategic Management
Direct Procurement
The buying of supplies that go into the actual manufacturing of a product; as an example, if a customer is a builder of airplanes, the buying of sheets of steel and plastic would constitute direct procurement; supply chain management concerns itself with direct procurement (whereas e procurement is concerned with indirect procurement); see B2B, e Procurement, Indirect Procurement, and Supply Chain Management.
D
Strategic Management
Diseconomies of scale
The average cost per unit of output increases as total output increases.
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Encyclopedia Strategic Management (255 Terms)
D
Strategic Management
Distinctive competence
Special skills and resources that generate strengths that competitors cannot easily match or imitate.
D
Strategic Management
Diversification
The process of a company moving into new products or enterprises.
D
Strategic Management
Divestiture
Divestiture usually takes one of two forms-spinning a business off as an independent company or selling it to another company.
D
Strategic Management
Dominant strategy
A strategy that is the best decision for the firm, no matter what decision its competitor makes.
D
Strategic Management
Driving Forces
Industry conditions change because important forces are driving industry participants (competitors, customers, or suppliers) to alter their actions; the driving forces in an industry are the major underlying causes of changing industry and competitive conditions.
E
Strategic Management
E Business
The process of doing business over the internet; in general, there are three (3) kinds of e Business, B2B (business performed between separate companies over the internet), B2C (business over the internet between a company and its customers), and B2E (Business-to-Employee or the enabling of an employee to access his or her records from a single point-of entry over the internet); see also B2B, B2C, B2E, CRM, e Procurement, and Supply Chain Management.
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Encyclopedia Strategic Management (255 Terms)
E Procurement
The process of buying supplies and materials over the internet; in general, e Procurement deals with indirect purchasing (see below), that is, with the buying of materials for the every day functioning of an office (paper, pencils, pens, computers, printers, telephones, etc.); studies have shown that by automating procurement and having a computerized system govern the purchasing choices, ―maverick‖ buying is drastically reduced and savings of 10-40% can result; the process within e Procurement of selecting the optimum vendor depending on a particular product or quantity is known as ―Strategic Sourcing‖; leading e Procurement vendors include Ariba, Rightworks (now part of i2 Corporation), and SAP; see also B2B, e Procurement, and indirect procurement.
E
Strategic Management
EAI - Enterprise Application Integration
The ongoing process of putting an infrastructure in place, so that a logical environment is created that allows business people to easily deploy new or changing business processes that rely on IT. EAI is a way of increasing the business value of your IT environment. The EAI market originated with the installation of enterprise resource planning (ERP) systems on a wide scale in the early 1990s. Customers had existing applications they wanted to leverage in the context of the ERP applications, and they could only do this by introducing EAI. Therefore, EAI has been very much a user-driven market. The trend toward enterprise application integration is a logical progression. Companies once used client/server technology to build departmental applications, but later realized the gains in linking multiple business processes. Companies built distributed computing environments, only to find a competitive advantage in expanding those applications to include external business partners. But perhaps the biggest draw to EAI comes from the increasing number of Web-related projects and the realization that implementation times are shrinking. It is often more expedient to develop an EAI strategy that reuses applications rather than starting from scratch. A successfully integrated enterprise can reward your organization with significant cost, resource, and time savings. Enterprise Applications Integration (EAI) connects existing and new systems to enable collaborative operation within your entire organization. A successfully integrated system allows information to work harder and smarter, increasing the speed of business reaction time, and facilitating seamless, straight-through transaction processing.
E
Strategic Management
Economic profit
A concept that represents the difference between the profits earned by investing resources in a particular activity, and the profits that could have been earned by investing the same resources in the most lucrative alternative activity.
E
Strategic Management
Economic Value
The worth (monetary value to the customer) of the benefits of an offering.
E
Strategic Management
Economics
Cost savings.
E
Strategic Management
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Encyclopedia Strategic Management (255 Terms)
E
Strategic Management
Economies of density Cost savings that arise with a greater geographic density of consumers.
E
Strategic Management
Economies of integration
Cost savings generated from joint production, purchasing, marketing or control.
E
Strategic Management
Economies of scale
The average cost per unit of output decreases as total output increases.
E
Strategic Management
Economies of Scope
Economies of scope arise from the ability to eliminate costs by operating two or more businesses under the same corporate umbrella; the cost-saving opportunities can stem from strategic fit relationships anywhere along the businesses' value chains.
E
Strategic Management
Economies of size
Fixed costs decline as output increases.
E
Strategic Management
Emergent strategy
An unplanned strategy that emerge from within the organization.
E
Strategic Management
Enterprise (Strategic In a farm operation, the production of a single crop or type of livestock, such as wheat or dairy. A ―responsibility‖ center. Business Unit)
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Encyclopedia Strategic Management (255 Terms) E
Strategic Management
Enterprise strategy
How an enterprise competes within a specific market or industry. Also called business or competitive strategy.
E
Strategic Management
Entrepreneur
An entrepreneur sees change as normal and healthy. He/she is involved in searching for change, responding to it, and exploiting it as an opportunity.
E
Strategic Management
Environmental analysis
An analysis of the environmental factors that influence a company’s operations.
E
Strategic Management
Environmental opportunity
An attractive area for a company to participate in where the company would enjoy a competitive advantage.
E
Strategic Management
Environmental Scanning
Managers can use environmental scanning to spot budding trends and clues of change that could develop into new driving forces.
E
Strategic Management
Environmental threat
An unfavorable trend or development in the company’s environment that may lead to an erosion of the company’s competitive position.
Equity Engine
The brand name of a market research technique offered by the firm Research International that has been used to provide data for a customer-perceived-value analysis. The Equity Engine approach gathers data on the performance of each brand in a market category on the key buying factors. RI splits the key buying factors into two main categories, functional and emotional. They have developed a unique battery of questions to measure nine attributes in the emotional category, which they label brand affinity. To learn about converting your data from the Equity Engine format to data suitable for CVI’s Marketing War Room analyses, please contact us.
E
Strategic Management
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Encyclopedia Strategic Management (255 Terms)
E
Strategic Management
ERP—Enterprise Resource Planning
A company’s financial/accounting system often augmented by Sales Analysis, Inventory Management, Billing, and Materials Resource Planning (MRP) Systems; leading ERP vendors include SAP, PeopleSoft, J D Edwards, Great Plains, and many others; many such vendors are ―web-enabling‖ their systems, allowing their users to utilize them over the internet from remote sites (as in mySAP).
E
Strategic Management
Excess capacity
The ability to produce additional units of output without increasing fixed capacity.
E
Strategic Management
Experience curve
Systematic cost reductions that occur over the life of a product. Product costs typically decline by a specific amount each time accumulated output is doubled.
E
Strategic Management
Externalities
A cost or benefit imposed on one party by the actions of another party. Costs are negative externalities and benefits are positive externalities.
F
Strategic Management
Fair Price
The price for a product that customers are willing to pay, on average, for a specific level of performance. It is equivalent to the economic value of the offer. To determine the fair price for a product, locate its performance score on the horizontal axis of a value map, move up vertically to the fair-value line, and move horizontally to the price on the vertical axis.
F
Strategic Management
Fair-Value Line
A reference line on a value map that reflects how much customers are willing to pay, on average, for different levels of performance. The fair-value line passes through the intersection of the average price and average benefit lines – a point of, by definition, average value. All of the points on the fair-value line represent average value. See slope of fair-value line.
F
Strategic Management
Fair-Value Zone
A zone on a value map representing customer value close to and spaced equally above and below the fair-value line. The width of the zone can be set as a percentage of the average price in the category or as a monetary amount.
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Encyclopedia Strategic Management (255 Terms)
F
Strategic Management
Firm (company) strategy
How a firm will reach its goals and achieve its vision using firm strengths to take advantage of environmental (market and other business) opportunities.
F
Strategic Management
Firm vision
The collection of statements listed below indicating the desired strategic future for the firm.
F
Strategic Management
First mover advantage
The competitive advantage held by a business from being first in a market or first to use a particular strategy.
F
Strategic Management
Five-forces analysis
An approach that uses economic tools to analyze an industry. The five forces are internal rivalry, entry, substitute and complement products, supplier power, and buyer power.
F
Strategic Management
Floor targets
A floor target is a national minimum performance standard that all relevant organisations must achieve, for example, in literacy, numeracy and GCSEs.
F
Strategic Management
Focus strategy
A targeting strategy that concentrates either on offering a single product or serving a single market segment or both.
F
Strategic Management
Forward (downstream) integration
Output buyers are brought into the firm.
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Encyclopedia Strategic Management (255 Terms)
F
Strategic Management
Frontier Offerings
Products and bundled services that sell at the lowest price in their performance range. If an offering provides both the lowest price and best performance, it dominates every other offering in the category.
F
Strategic Management
Frontier Price
The price for a product that would offer value to customers comparable to products selling at the lowest price in their performance range. To determine the frontier price for a product not on the frontier line, locate its performance score on the horizontal axis of a value map, move up vertically to the frontier line, and move horizontally to the price on the vertical axis.
F
Strategic Management
Full integration
Where one firm has full ownership and control over all the value chain of a product.
F
Strategic Management
Functional Strategy
Functional strategy concerns the managerial game plan for running a major functional activity or process within a businessR&D, production, marketing, customer service, distribution, finance, human resources, and so on; a business needs as many functional strategies as it has major activities.
G
Strategic Management
Global competition
Global competition exists when competitive conditions across national markets are linked strongly enough to form a true international market and when leading competitors compete head to head in many different countries.
G
Strategic Management
Goals
General statements of what the firm want to achieve in reaching its vision.
G
Strategic Management
Golden thread
A few councils use this to describe the link between the different plans within their organisation. This helps to make sure that individuals' contributions are directly linked to overall objectives and strategies.
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Encyclopedia Strategic Management (255 Terms)
G
Strategic Management
Goodness of the deal
An evaluation of whether or not the customer paid a fair price for a product. A good deal is where the customer pays a price that is less than the fair price (as determined by the product’s relative performance.)
G
Strategic Management
Group think
A tendency of individuals to adopt the perspective of the group as a whole. It occurs when decision makers don’t question the underlying assumptions.
H
Strategic Management
Head-to-Head Value A report or graph comparing the attribute performances and relative values for a target model versus a reference model. Comparison
I
Strategic Management
Indirect Procurement maintenance parts for repair [known as MRO—Maintenance, Repair, and Operations]); see B2B, Direct Procurement, and e
I
Strategic Management
Industry
A group of firms producing identical or similar products.
I
Strategic Management
Industry Concentration
The degree to which a few firms dominate an industry and control large market shares.
I
Strategic Management
Innovation
A new way of doing things.
The buying of materials required for the simple day-to-day functioning of a business (paper, pencils, printers, computers, Procurement.
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Encyclopedia Strategic Management (255 Terms)
I
Strategic Management
Input
Inputs are 'resources that contribute to production and delivery, or the resources (staff, materials and premises) employed to provide the service'. In other words, they are what go 'into' a service or activity.
I
Strategic Management
Intended strategy
Planned strategy developed through the strategic planning process.
I
Strategic Management
Internal rivalry
Competitiveness of firms within an industry.
I
Strategic Management
Internal scanning
Looking inside the business and identifying strengths and weaknesses of the company.
I
Strategic Management
International (multinational) company
A company is an international (or multinational) competitor when it competes in a select few foreign markets. It is a global competitor when it has or is pursuing a market presence on most continents and in virtually all of the world's major countries.
I
Strategic Management
Investment center
A strategic business unit or enterprise that has a manager who is responsible for profit and investment performance and who controls most of the factors affecting revenues, costs, and investments.
K
Strategic Management
Key Buying Factors (KBFs)
The list of important benefit and cost attributes that customers evaluate and value when choosing among competing brands. The list of KBFs will differ by product category, for example: computers – connectivity; retail banking – short queues; aircraft engines – spare parts availability; candy and nuts – freshness; outsourcing – contract flexibility.
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Encyclopedia Strategic Management (255 Terms)
K
Strategic Management
Key Success Factors
Key success factors concern the product attributes, competencies, competitive capabilities, and market achievements with the greatest direct bearing on company profitability.
L
Strategic Management
Late mover advantage
The competitive advantage held by businesses that are late in entering a market. Late movers often imitate the technological advances of other businesses or reduce risks by waiting until a new market is established.
L
Strategic Management
Learning curve
The cost advantages that flow from accumulating experience and know-how over the life of a product.
L
Strategic Management
Limit pricing
The practice whereby an existing firm in the industry can discourage entry by charging a low price.
M
Strategic Management
Make-or-buy decision
The decision of whether a firm should produce a product or service within the firm or buy it. Usually relates to decisions relating to upstream or downstream activities or business support activities.
M
Strategic Management
Market
Can be defined as narrowly as a specific place where buying and selling takes place or as broadly as the demand for a product or service.
M
Strategic Management
Market segment
A group of consumers within a broader market who possess a common set of characteristics.
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Encyclopedia Strategic Management (255 Terms) M
Strategic Management
Market structure
The number and size distribution of the firms in a market.
M
Strategic Management
Marketing War Room™ Software
Computer software offered by Customer Value, Inc. used to analyze a product’s price, performance, and value position relative to competitors and to simulate actions to improve competitiveness. It takes a performance profile as input and creates the associated value map, value scorecard, and head-to-head value comparisons. The software contains a variety of analytical tools for managing customer value.
M
Strategic Management
Market-share Strategy
Activities associated with deciding whether to build, hold, or harvest market share and related decisions about positioning your products’ performance and whether to price for margin or growth. Pricing above your product’s fair price will typically lead to market-share loss. Pricing on or near the best-value frontier will typically lead to market-share gain. Changing performance opens up many other options for changing market share. (For a summary of PIMS research linking market share to the bottom line, see the Harvard Business Review article reprint, ―Market Share — a Key to Profitability,‖ by Robert D. Buzzell, Bradley T. Gale, and Ralph GM Sultan.)
M
Strategic Management
Milestones
Rather than just working towards a final objective or target, milestones outline 'steps' towards it. They help you to assess your progress along the way and to identify issues as they arise rather than at the end.
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Strategic Management
Minimum efficient scale
The smallest output for which unit costs are minimized.
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Strategic Management
Mission
An action statement of how the firm will achieve its vision.
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Strategic Management
Mission Statement
A company's mission statement is typically focused on its present business scope-"who we are and what we do"; mission statements broadly describe an organization's present capabilities, customer focus, activities, and business makeup.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Monitoring
Active monitoring is not just about receiving information; it also involves tackling the issues it raises, as well as making decisions or re-organising resources or action plans.
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Strategic Management
Most Valuable Customers
Customers, or customer segments, providing the largest stream of profits over the relevant time horizon. Marketers target customers that can provide the greatest discounted present value of future profits.
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Strategic Management
Multicountry (or multidomestic) competition
Multicountry (or multidomestic) competition exists when competition in one national market is independent of competition in another national market-there is no "international market," just a collection of self-contained country markets.
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Strategic Management
Net Value Advantage
A metric for comparing two deals. It is defined as the difference in the fair value of the two products less the difference in actual price. If product A has a positive net value advantage over product B, we say that A is a better deal.
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Strategic Management
Niche strategy
A strategy serving a specialized part of the market.
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Strategic Management
Objectives
Objectives are an organization's performance targets-the results and outcomes it wants to achieve. They function as yardsticks for tracking an organization's performance and progress.
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Strategic Management
Operating Strategy
Operating strategy concerns how to manage front-line organizational units within a business (plants, sales districts, distribution centers) and how to perform strategically significant operating tasks (materials purchasing, inventory control, maintenance, shipping, advertising campaigns).
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Operations management
Focuses on the performance and efficiency of the production process. It involves the day-to-day decisions of the business.
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Strategic Management
Opportunities and threats
Strategic factors in the firm’s external environment are categorized as opportunities or threats to the firm.
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Strategic Management
Organizational Strategy
An organization's strategy deals with how to make management's strategic vision for the company a reality-it represents the game plan for moving the company into an attractive business position and building a sustainable competitive advantage.
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Strategic Management
Outcome
This is the effect that our activities have on the community or other target group. It's important that activities make a difference and that we don't just do them for the sake of it.
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Strategic Management
Output
Outputs are 'the goods and services produced by the organisation'. For example, they include how many bins a local council empties and the percentage of Council Tax it collects. They can link inputs to outcomes so it's worth using them with other sorts of indicators.
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Strategic Management
Peer review
Basically, this means getting other people to look at what you are doing, ask questions and make suggestions. Questions can help you to make things clearer; look into what you could do differently; and check that you have left nothing out.
Performance indicator (PI)
PIs measure how you are doing in a given activity. You will often see the terms 'performance indicators' and 'performance measures' both used to describe 'how well a service is performing against its objectives', or 'the measure of a[n] authority's performance in exercising a function'. Examples include the number of invoices that a local council pays on time or the percentage of Council Tax it collects.
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Strategic Management
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Performance management (framework)
This can be 'managing the performance of an organisation or an individual' or 'what you do to improve and maintain good performance '. It involves you understanding and acting on performance issues at each level of your organisation, from individuals, teams and directorates, through to the organisation itself.
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Strategic Management
Performance measurement
This involves deciding what you want to measure and why; setting up the individual performance measures with definitions and relating them to individuals or teams; collecting the relevant data, including past current performance, forecasts and targets. It helps you to monitor your services and products and allows organisations to identify good performance, learn from others, and focus on their priorities and any areas of poor performance. Performance measurement is, however, only part of a bigger performance management framework and is an ongoing improvement process which involves not just systems but people and whole organisations.
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Strategic Management
Performance standards
A performance standard is a 'minimum acceptable level of performance, or the level of performance that is generally expected'.
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Strategic Management
Personalization
The personalizing of an individual’s entry into a web site so that the individual is greeted in a personal manner (e.g., ―Hello, Mr. Black. Welcome back to our web site. When you last visited us, you bought a book by Susan Sontag. Would you be interested in reviews on her most recent novel?‖); see B2C, CRM, Cross Selling, and Up Selling.
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Strategic Management
PIMS (Profit Impact of Market Strategy)
An ongoing research and consulting activity focused on competitive marketing strategy and benchmarking using a businessunit database. The research and benchmarking activity focuses on measuring metrics that track a business’s competitive position (relative overall quality/performance, market share, and capital intensity) and relating competitive position and market attractiveness metrics to measures of business results (profitability and growth). (Empirical findings from PIMS research are summarized in the book, The PIMS Principles, Linking Strategy to Performance, by Robert D. Buzzell and Bradley T. Gale.) For more information, see the PIMS web site.
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Strategic Management
Portal
A single point-of-entry through the internet into a particular web site; see B2C, CRM, and Personalization.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Portfolio
A group of strategic business units or enterprises within a firm that are managed as individual responsibility centers.
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Strategic Management
Portfolio analysis
Each strategic business unit or enterprise is considered as an individual responsibility center for purposes of strategy formulation.
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Strategic Management
Portfolio management
The collective management of a firm’s individual strategic business units or enterprises and the resources across these enterprises.
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Strategic Management
Predatory act
A strategy that increases profits by deterring entry or promoting exit of competitors.
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Strategic Management
Predatory pricing
Aggressiveness by a firm against its rivals with the intent of driving them out of business.
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Strategic Management
Price
The sum of money or goods asked for or given in exchange for something.
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Strategic Management
Price Customization
Setting different prices for different market sub-segments, pricing higher in sub-segments that perceive the most differential worth in your product, and reducing price to appeal to other sub-segments according less worth to your product.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Price Differential
The difference between the price of an offering and the price of a reference offering. Products that perform better than average are often priced higher than the average price. Products that perform worse than average are often priced lower than average.
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Strategic Management
Price Premium
The selling price of the vendor's product minus the selling price of a reference product. It is the opposite of the price advantage a vendor enjoys when selling at a price below the price of the reference product.
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Strategic Management
Price-Performance Database
A database developed by Bradley Gale at Customer Value, Inc. containing value accounting metrics for more than 550 products in more than 50 categories. It can be used to determine category value benchmarks and make cross-category comparisons.
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Strategic Management
Price-Performance Profile
A table showing customer-perceived performance scores, attribute relative importance, and prices of major offerings in a category for the major competitors in the market.
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Strategic Management
Primary enterprise
An enterprise that provides the foundation of the business. The success of the primary enterprise is critical to the success of the business.
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Strategic Management
Priorities
Priorities are issues that you consider more urgent than other things. Priorities can be national and set by the Government. They can also be local, agreed between local organisations or communities, or decided internally.
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Strategic Management
Proactive
Seek out opportunities and take advantage of them. Anticipate threats and neutralize them.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Product Appraisal
The process of evaluating how much a product is worth. This is done by comparing the performance of the product against comparable products on the market. The justified price for, say, product A will be the price of the competing products adjusted up or down by on the value of product A’s performance advantages or disadvantages relative to those products. The Product Appraisal Table is a standardized layout for doing this comparison.
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Strategic Management
Product life cycle
A model where product demand is low when it is introduced. The product then enters a period of rapid demand growth that gradually levels off and sometimes declines.
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Strategic Management
Profit center
A strategic business unit or enterprise that has a manager who is responsible for profit performance and who controls most of the factors affecting revenues and costs.
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Strategic Management
Quasi-integration
A firm that gets most of its requirements from an outside supplier who is under its partial control.
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Strategic Management
Realized strategy
The real strategy of a business that is either an intended (planned) strategy of management or an emergent (unplanned) strategy from within the organization.
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Strategic Management
Relative Value
The amount of value captured by customers, calculated as the fair price of an offering minus its selling price. Products on the frontier of a value map offer the greatest value to customers in their performance range.
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Strategic Management
Resource Strengths and Weaknesses
A company's resource strengths represent competitive assets; its resource weaknesses represent competitive liabilities.
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Strategic Management
Resources
Firm-specific assets such as patents and trademarks, brand-name reputation, financial assets, trained labor force, management capabilities and organizational culture that provide the basis for the firm’s profitability and competitiveness.
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Strategic Management
Responsibility center
A strategic business unit or enterprise within a firm whose performance is evaluated separately and is held responsible for its contribution to the company’s mission and goals.
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Strategic Management
Restructuring
Selling off unrelated parts of a business in order to streamline operations and return to a core business.
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Strategic Management
Risk Management Process
A framework developed to help identify the barriers, obstacles, threats and areas of vulnerability and provide the basis on which any subsequent issues and risks can be recorded, evaluated and controlled.
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Strategic Management
Risk Management, Definition
The planned and systematic approach used to identify, evaluate and control the whole range of business risks, which might prevent a service or organisation from achieving its objectives. Think of it as making the most of new or developing issues and existing situations by managing the things that get in the way - the barriers and obstacles - to delivering the objectives of the organisation, service and staff (in their day to day activities).
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Strategic Management
Robust
Any performance management framework must be able to cope with change, such as restructuring or individuals leaving. Systems can fall apart if not enough people are involved, or if responsibility is left to just one person. You can make your frameworks more robust by using procedure notes, and continual monitoring and good communications.
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The management and automation of the chain of events that begins with the buying of supplies and ends with the selling of a product; in the classic sense, a supply chain consists of five (5) processes: Buy, Make, Move, Store, Sell—that is, the buying of supplies, the making of a product, the moving of that product to a Distribution Center, the storing of that product in inventory, and finally the selling and shipping of that product (also known as fulfillment). Contemporary SCM also answers the following crucial questions—Where can my company find the right materials at the best price (i.e. direct procurement)? When will those materials be available? How long will it take to manufacture those products and deliver them to the Distribution Centers? Which Distribution Centers should we send them to? Based on all of the above, when will we be able to deliver product to the retailer for sale to the consumer and what would be the best means of delivery? see also B2B, Collaboration, Direct Procurement, and Supply Chain Visibility.
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Strategic Management
SCM - Supply Chain Management
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Strategic Management
Secondary enterprise An enterprise that supports a primary enterprise and/or the mission and goals of the business.
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Strategic Management
Service Risk Risk management process, included as part of the service planning framework, to identify, evaluate and manage significant Assessment, Process service level and organisational issues and risks facing the service and council. (exercise could also highlight some further Corporate and Cross Cutting items). or Exercise
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Strategic Management
Slope of Fair-Value Line
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Strategic Management
SMART (in respect of Specific, Measurable, Action-orientated, Realistic and Timely. target setting)
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Strategic Management
Stakeholder
The amount of change in fair-value price per point of overall performance.
Individuals and groups inside and outside the firm who have an interest in the actions, decisions and performance of the firm.
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Strategic Management
Step change
As opposed to incremental change, step change is about making major changes in your services and activities within a limited timescale.
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Strategic Management
Strategic
Maneuvering yourself into a favorable position to use your strengths to take advantage of market and other business opportunities.
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Strategic Management
Strategic alliance
An agreement between two or more firms to collaborate on a business project or to share information.
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Strategic Management
Strategic alternatives
Alternative courses of action that achieve business goals and objectives, by using firm strengths to take advantage of environmental opportunities.
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Strategic Management
Strategic audit
A checklist of questions that provide an assessment of a company’s strategic position and performance.
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Strategic Management
Strategic commitments
Decisions that have long-term business performance impacts and are difficult to reverse.
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Strategic Management
Strategic Cost Analysis
Strategic cost analysis involves comparing how a company's unit costs stack up against the unit costs of key competitors activity by activity, thereby pinpointing which internal activities are a source of cost advantage or disadvantage.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Strategic decisions
A series of decisions used to implement a strategy.
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Strategic Management
Strategic factors
Strategic issues expected to have a high probability of occurrence and impact on the business.
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Strategic Management
Strategic fit
Fit between what the environment wants and what the firm has to offer.
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Strategic Management
Strategic group
A set of firms within an industry that are similar. They are different from firms outside the group on one or more key dimensions of their strategy.
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Strategic Management
Strategic Group Mapping
Strategic group mapping is a technique for displaying the different competitive positions that rival firms occupy in the industry.
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Strategic Management
Strategic Intent
A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective and concentrates its competitive actions and energies on achieving that objective.
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Strategic Management
Strategic issues
Trends and forces which occur within the business or within the environment surrounding the business.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Strategic Management
The term strategic management refers to the managerial process of forming a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then over time initiating whatever corrective adjustments in the vision, objectives, strategy, and execution are deemed appropriate.
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Strategic Management
Strategic myopia
Management’s failure to recognize the importance of responding to changes in the external environment because they are blinded by their shared, strongly held beliefs.
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Strategic Management
Strategic Objectives
Strategic objectives relate to outcomes that strengthen an organization's overall business position and competitive vitality; Financial objectives relate to the financial performance targets management has established for the organization to achieve.
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Strategic Management
Strategic Plan
A strategic plan consists of an organization's mission and future direction, near-term and long-term performance targets, and strategy.
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Strategic Management
Strategic predisposition
A tendency of a company by virtue of its history, assets, or culture to favor one strategy over other possibilities.
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Strategic Management
Strategic thinking
How decisions made today will effect the firm years in the future.
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Strategic Management
Strategic Vision
A strategic vision is a roadmap of a company's future-providing specifics about technology and customer focus, the geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of company that management is trying to create.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Strategy
A company's strategy consists of the combination of competitive moves and business approaches that managers employ to please customers, compete successfully, and achieve organizational objectives.
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Strategic Management
Strategy control
Compares performance with desired results and provides the feedback for management to evaluate results and take corrective action.
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Strategic Management
Strategy Execution
Strategy execution deals with the managerial exercise of supervising the ongoing pursuit of strategy, making it work, improving the competence with which it is executed, and showing measurable progress in achieving the targeted results.
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Strategic Management
Strategy formulation
The development of long-range plans for the management of environmental opportunities and threats in light of the business’s strengths and weaknesses.
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Strategic Management
Strategy Implementation
Strategy implementation concerns the managerial exercise of putting a freshly chosen strategy into place.
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Strategic Management
Strengths and weaknesses
Strategic factors within the firm are categorized as strengths or weaknesses of the firm.
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Strategic Management
Supplementary enterprises
Enterprises for which the level of production of one can be increased without affecting the level of production of the other.
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Encyclopedia Strategic Management (255 Terms)
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Strategic Management
Supplier power
The ability of input suppliers to negotiate prices that extract profits from their customers.
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Strategic Management
Supply Chain Visibility
The ability to ―see into‖ a company’s manufacturing and distribution process to determine where a product is in its total life cycle (Is it still being manufactured? Has it been stored in a Distribution Center? Is it in transit between the Distribution Center and the Retail Store? If so, how long will it take to get to the store and into the customer’s hands?); see also B2B, Collaboration, Direct Procurement, and Supply Chain Management.
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Strategic Management
Sustainable Competitive Advantage
A company that can expand its stock of strategic assets faster and at lower cost than rivals obtains sustainable competitive advantage.
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Strategic Management
Switching costs
The costs incurred when a buyer switches from one supplier to another.
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Strategic Management
SWOT analysis
Analysis of the strengths and weaknesses of the business and the opportunities and threats of the business’s environment.
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Strategic Management
Systematic innovation
The purposeful and organized search for changes, and the systematic analysis of the opportunities these changes might offer for economics and social innovation.
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Strategic Management
Tactical decisions
Decisions that are easily reversed and where impact persists only in the short run.
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Strategic Management
Tapered integration
A firm that produces part of its own input requirements and/or markets part of its own products and buys the rest of the inputs from outside suppliers and/or sells the rest of its products to outside markers.
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Strategic Management
Throughput
The movement of inputs and outputs through a production process.
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Strategic Management
TQM
TQM entails creating a total quality culture bent on continuously improving the performance of every task and value chain activity.
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Strategic Management
Transfer price
The price at which a good or resource is transferred from one enterprise (strategic business unit) to another within the firm. For example, the price used in transferring corn from the corn enterprise to the hog enterprise. Market price is usually used as the basis for determining transfer price.
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Strategic Management
Uniform delivered pricing
A single delivered price that a seller quotes for all buyers and in which the seller absorbs any freight charges.
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Strategic Management
Uniform FOB pricing
A price that a seller quotes for pickup at the seller’s loading dock, and the buyer absorbs the freight charges for shipping from the seller’s plant to the buyer’s plant.
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Strategic Management
Unrelated Diversification
A strategy of unrelated diversification involves diversifying into whatever industries and businesses hold promise for attractive financial gain; exploiting strategic-fit relationships is secondary.
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Strategic Management
Up Selling
A term in CRM that refers to the selling of products that may be of a higher quality or grade when a customer is buying over the internet; as an example, when a customer is buying a set of golf clubs, the web site might offer the following suggestion—―Thank you for your order. You have just selected an outstanding set of golf clubs. However, you might be interested to know that the same manufacturer has just produced a new set of clubs with titanium shafts that could improve your driving range by 20%. Would you be interested?‖; see also B2C, CRM, and Cross Selling.
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Strategic Management
Value Accounting
The discipline of analyzing a product’s worth to customers on an attribute-by-attribute basis, and determining how much customers will pay for it versus competitive offerings. [See, ―How Much Is Your Product Really Worth – Optimize your pricing with Value Accounting and the Value Scorecard.‖] Customer-perceived value analyses help a product team to assess its competitive position, nominate alternatives for improving performance, set prices based on an integrated view of cost, price, and economic value data, and craft a winning value proposition.
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Strategic Management
Value Chain
A company's value chain identifies the primary activities that create value for customers and the related support activities.
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Strategic Management
Value created
The difference between the value that resides in a finished good and the value that is sacrificed to produce the finished good.
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Strategic Management
Value Map
A value map contains a plot of the prices and overall performance scores of competing offerings in a market category or segment. CVI’s value map contains reference lines for assessing customer-perceived fair value and the best combinations of performance-for-price in the category. CVI’s Marketing War Room software contains value mapping tools that make it easy for people working in competitive marketing strategy on product positioning and perceived value pricing to produce visual displays of alternative competitive strategies and scenarios. (See Value Pricing.)
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Strategic Management
Value Position
How a product compares to competitors, as reported on a value scorecard, price-performance profile, and value map.
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Strategic Management
Value Proposition
An offering’s performance and price promise to potential buyers. Competitive marketing strategy teams can cross check their current value proposition against the perceptions of customer using market research and several CPV tools. For example, if your brand promise is rapid acceleration, but customers perceive other models as accelerating better, your promoted value proposition won’t connect with customers. You can craft a new value proposition using CPV tools, building on the competitive strengths of your brand.
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Strategic Management
Value Selling
An approach to selling that attempts to quantify to a customer the economic value, or monetary worth, of your product’s performance advantages versus competing products.
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Strategic Management
Value-Based Pricing
A technique for setting prices that recognizes the relative economic value, or worth to customers, associated with a brand’s features and performance. Worth is calculated by looking at the brand’s comparative strengths and weaknesses on the key buying factors that customers value when selecting a brand. (See, ―How Much Is Your Product Really Worth – Optimize your pricing with Value Accounting and the Value Scorecard.‖) The Value Map is a key tool used in Value Pricing.
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Strategic Management
Value-Based Pricing Chart
A visual summary of the key elements of value-based pricing. The chart shows the development of a fair-price, starting from a reference price (typically a market average) and adjusted upward or downward by performance differences and differences in the customers’ economics in using the product relative to the reference product. The chart also shows current price, costs and margins relative to the product’s estimated worth.
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Strategic Management
Value-Strategy Simulator™
The Marketing War Room Software feature that automatically updates associated value maps, value scorecards, and head-tohead value comparisons from changes in a price-performance table. The software allows all members of a business team to see those four exhibits on a screen, real time, in a meeting environment.
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Strategic Management
Vertical chain
The process that begins with the acquisition of raw materials and ends with the distribution and sale of finished goods.
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Strategic Management
Vertical coordination
The stages in the value chain of a product that are linked by more than open markets but less than full ownership.
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Strategic Management
Vertical integration
The process in which either input sources or output buyers of the firm’s products are moved inside the business.
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Strategic Management
Vertical merger
Firms in various stages of the value chain are linked together.
Voice of the Customer (VOC)
Is a research technique pioneered by Abbie Griffin and John R. Hauser. It was developed into a detailed market research analysis of attribute hierarchy by the research firm Applied Marketing Science, founded by MIT marketing professor John Hauser and located in Waltham, Massachusetts. Many companies adopting Six Sigma practices carry out a VOC-type study to gain insights from customers. To provide the data that you need for a customer-perceived value analysis and value pricing, you need to expand the typical VOC research to gather data on the performance of competing products.
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Strategic Management
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Strategic Management
Web Services
An open set of standards for how systems connect to one another and communicate information. Web Services is based on a distributed computing framework and provides a facility for applications or systems to collaborate with one another regardless of how, where, or what platform the applications are implemented on. Many EAI vendors support web services. From a value proposition Web Services means that you can leverage your existing infrastructure inside your enterprise, or use the business processes of your partners and customers easily.
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Strategic Management
Worth
The economic value of the benefits associated with an offering, as perceived by the average customer in the category.
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