CHAPTER 4: Evaluating the Internal Environment 8.

​ Value Chain a step by step business

transaction for transforming a product or
1.​ A resource is strategic to the extent that it is service from idea to reality.FALSE
valuable, rare, difficult to imitate, and organized 9.​ Intellectual property can serve as a strategic
to capture value.TRUE resource for organizations.TRUE
2.​ The value chain provides a useful tool for 10.​Secondary activities are actions that are
managers to examine systematically where directly involved in creating and distributing
value may be added to their goods and services.(PRIMARY ACTIVITIES)
organizations.TRUE 11.​Patents protect inventions from direct imitation
3.​ Are phrases, pictures, names, or symbols used for a lifetime.(LIMITED PERIOD OF TIME)
to identify a particular organization. 12.​A firm’s strategy to prevent a competitor from
TRADEMARKS imitating the resource or capability that gives it
4.​ Resources refer to what the organization can a competitive advantage.ISOLATING
do.(CAPABILITIES) MECHANISM
5.​ Secondary activities are directly involved in 13.​The Value Chain is used as an external
the evolution of a product, but instead provide assessment tool to help a firm determine
important underlying support for primary where it might be able to achieve a competitive
activities. (NOT DIRECTLY) advantage.(INTERNAL)
6.​ Path Dependence can serve as an isolating 14.​Strategic resource is an asset that is valuable,
mechanism to block competitors from gaining rare, difficult to imitate, and organized to
the different position in the market. (SAME capture value. TRUE
POSITION) 15.​This model examines any resources and/or
7.​ Refers to creations of the mind, such as capabilities of the firm that may provide a
inventions, artistic products, and competitive advantage.RESOURCE
symbols.INTELLECTUAL PROPERTY BASED-VIEW
16.​Resources can be divided into four main 25.​Competitors have a hard time duplicating
types.(TWO) resources that are easy to imitate.
17.​Trade secrets refer to formulas, practices, and (DIFFICULT)
designs that are central to a firm’s business
and that remain known to ●​ Resource-Based View

competitors.(UNKNOWN) -​ This model examines any resources

18.​Each element of a firm’s primary and and/ or capabilities of the firm that

supportive activities were examined to see if it may provide a competitive

can provide a competitive advantage over its advantage.

rivals.VALUE CHAIN ANALYSIS ●​ VRIO framework

19.​Value chains include both primary and -​ Used to evaluate each resource or

secondary activities.TRUE capability to determine what type, if

20.​Capabilities refers to what an organization any, of competitive advantage it

owns.(RESOURCES) brings.

21.​Organizations that own “strategic resources” ●​ Patents or isolating mechanisms

have important competitive advantages over -​ can reduce or eliminate temporarily

organizations that do not.TRUE the opportunity for a rival to imitate.

22.​The rights of creators of original artistic works ●​ Value Chain Analysis

are protected by patent.(COPYRIGHTS) -​ Each element of a firm’s primary and

23.​Some resources, such as cash and trucks, are supportive activities are examined to

not considered to be strategic resources.TRUE see if it can provide a competitive

24.​ Resources and capabilities are the basic advantage over its rivals.

building blocks that organizations use to create

strategies.TRUE
●​ Resources can be divided into two main types: 4.​ Trade Secrets - s refer to formulas, practices, and
1.​ Tangible Resources - resources that can be designs that are central to a firm’s business and
readily seen, touched, and quantified. that remain unknown to competitors.
2.​ Intangible Resources - are quite difficult to see, ●​ Isolating Mechanisms
touch, or quantify -​ If a firm can prevent a competitor from imitating
●​ Capabilities refer to the firm’s ability to: the resource or capability that gives it a
1.​ Bundle competitive advantage, it is able to sustain that
2.​ Manage advantage longer.
3.​ Otherwise exploit resources ●​ Social Complexity
●​ VRIO: Four Characteristics of Strategic Resources -​ creates a barrier to imitation and can prolong a
1.​ Valuable competitive advantage possessed by an
2.​ Rare organization.
3.​ Difficult to imitate ●​ Path Dependence
4.​ Organized to Capture Value -​ can serve as an isolating mechanism to block
●​ Intellectual property competitors from gaining the same position in the
-​ refers to creations of the mind, such as inventions, market
artistic products, and symbols. ●​ Causal Ambiguity
●​ Types of Intellectual Property -​ means the reason for achieving a competitive
1.​ Patents - protect inventions from direct imitation advantage is not apparent
for a limited period of time. ●​ Value Chain
2.​ Trademarks - are phrases, pictures, names, or -​ Primary Activities
symbols used to identify a particular organization 1.​ Inbound Logistics
3.​ Copyrights - provide exclusive rights to the 2.​ Operations
creators of original artistic works such as books, 3.​ Outbound Logistics
movies, songs, and screenplays. 4.​ Marketing and Sales
5.​ Service
 -​ Secondary Activities
1.​ Firm infrastructure
2.​ Human resource management
3.​ Technology
4.​ Procurement
●​ The Value Chain
-​ is used as an internal assessment tool to help a
firm determine where it might be able to achieve a
competitive advantage.
CHAPTER 5: Synthesis of Strategic Issues and Analysis 8.​ SWOT is helpful in determining the strategic
issue facing the nation.(ORGANIZATION)
1.​ Firms that compete based on price and target 9.​ A best-cost strategy can be an effective
a wider market are following a focused cost business-level strategy to the extent that a firm
leadership strategy.(BROAD) offers differentiated goods and services at
2.​ A firm following a differentiation strategy relatively high prices.(LOW PRICES)
attempts to convince customers to pay a 10.​SWOT analysis takes an even wider focus by
premium price for its goods or services by centering on an individual firm.(NARROWER
providing unique and desirable features.TRUE FOCUS)
3.​ Firms that compete based on uniqueness and 11.​Focusing on generic strategies does not
target a wider market are following a focused allows executives to concentrate on the core
differentiation strategy. (NARROW MARKET) elements of firms’ business-level strategies.
4.​ Firms that charge relatively low prices and offer (ALLOWS)
substantial differentiation are following a 12.​Strategic groups analysis widens the focus by
best-cost strategy.TRUE centering on subsets of these competitors
5.​ The strategic issue is derived from the facts whose strategies are similar.(NARROWS)
and data provided by the external and internal 13.​Economies of scale occurs because expenses
analysis and its synthesis through the SWOT are distributed across a lesser number of
framework. TRUE items.(GREATER)
6.​ A firm may not match every characteristic that 14.​One way to help make the best cost strategy a
its generic strategy entails depending on the reality is to use a business model that slashes
nature of a firm’s industry.TRUE fixed costs.TRUE
7.​ A focused differentiation strategy requires 15.​A focused cost leadership strategy requires
offering unique features that fulfill the demands competing based on price to target a narrow
of a narrow market.TRUE market.TRUE
16.​Resolving the strategic issue will have a minor 25.​Firms that are stuck in the middle generally
impact on the direction and success of the firm. perform exceptionally good because they
(MAJOR) lack a clear market or competitive
17.​A generic, business-level strategy is also called pricing.(POORLY)
its generic competitive strategy.TRUE 26.​Business-level strategies examine how firms
18.​Using internal environment analysis tools like compete in a given industry.TRUE
PESTEL and Porter’s Five Forces help to 27.​A strategic issue is the primary matter faced by
determine opportunities and threats. an organization that must be addressed for the
(EXTERNAL) organization to survive, excel, or achieve a
19.​Strengths and weaknesses are assessed by major strategic initiative.TRUE
examining the firm.TRUE 28.​Successful use of a differentiation strategy
20.​ Firms compete on two general dimensions, depends on only offering unique features but
the source of competitive advantage and the also communicating the value of these features
scope of operations.TRUE to potential customers.(NOT ONLY)
21.​Ideally, the strategic issue is reduced to one 29.​If selecting a broad cost leadership or broad
concise sentence, so that it is easily captured differentiation strategy, the target market for the
and understood. TRUE product or service is broad, meaning less
22.​Porter’s Five Forces analysis examines the people who buy within that industry.(MOST
situation faced by the competitors in an PEOPLE)
industry.TRUE 30.​A generic business level strategy is a general
23.​Once the strategic issue is defined, strategies way of positioning a firm outside the
can be developed that address and resolve the industry.(WITHIN)
strategic issue and propel the organization 31.​Within the strategic management framework,
toward accomplishing its mission.(VISION) an organization must define and continue to
24.​SWOT analysis is a relatively simple tool for improve its generic, business-level
understanding a firm’s situation.TRUE strategy.TRUE
 32.​External environment assessment tools such ●​ Strategic Issue
as VRIO and Value Chain Analysis can lead to -​ is the primary matter faced by an organization that
must be addressed for the organization to survive,
organizational strengths and
excel, or achieve a major strategic initiative.
weaknesses.(INTERNAL) -​ defines what the organization needs to address
33.​Cost leadership is an effective business-level and resolve to move the organization forward
toward success by analyzing the data and
strategy to the extent that a firm offers high
information from the internal and external
prices, provides satisfactory quality, and assessments as presented in the SWOT.
attracts enough customers to be ●​ Executives using SWOT analysis
-​ compare internal strengths and weaknesses with
profitable.(LOW PRICES)
external opportunities and threats to generate
34.​The business decision makers define the ideas about how their firm might become more
strategic issue(s) at the beginning of the successful.
strategic management process, through a ●​ Strategic Issue
-​ First, it is an issue, something that needs to be
hunch or guess, but after the analysis is addressed and resolved. Second, it is strategic. It
completed.(DO NOT DEFINE) is a long-term issue whose resolution will help
35.​Firms that are able to offer low prices or move the organization toward its vision.
-​ Resolving the strategic issue will have a major
appealing unique features are referred to as
impact on the direction and success of the firm.
“stuck in the middle.” (NOT ABLE) -​ derived from the facts and data provided by the
external and internal analysis and its synthesis
through the SWOT framework
●​ SWOT framework
-​ Business decision makers do not define the
-​ helps to pull the most important information strategic issue(s) at the beginning of the strategic
into a format that can then be used in management process, through a hunch or guess,
but after the analysis is completed.
strategic management to determine the
strategic issue the firm needs to address
and resolve by consolidating a summary of
the other analyses into one framework.
 CHAPTER 4: Evaluating the Internal Environment CHAPTER 5: Synthesis of Strategic Issues and
Analysis
1.​ Section Video
1.​ Section Video
Understanding Intellectual Property (IP) [02:14]
The video for this lesson further explains intellectual Business strategy-SWOT analysis [03:08]
property. The video for this lesson discusses SWOT
You can view this video analysis. You can view this video here:
here:https://youtu.be/UqZJPuyK9VY. https://youtu.be/9-NWhwskTO4.

Video Credits
Video Credits
Federallabs. (2019, March 27). Understanding
intellectual property (IP) [Video]. YouTube. 365Careers. (2017, July 4). Business
https://youtu.be/UqZJPuyK9VY. strategy-SWOT analysis [Video]. YouTube.
https://youtu.be/9-NWhwskTO4.
2.​Section Video

Strategic Management: Value Chain Analysis 2.​ Section Video

[04:41]
The video for this lesson further discusses value Strategic Issues [01:57]
chain analysis. The video for this lesson discusses Strategic Issues.
You can view this video You can view this video here:
here:https://youtu.be/Tpb1fxt9YfU. https://youtu.be/Zj_dxbJpCqo.

Video Credits Video Credits

Melissa Schilling. (2020, May 25). Strategic Gregg Learning. (2018, June 9). Strategic
management: Value chain analysis [Video]. issues [Video]. YouTube.
YouTube. https://youtu.be/Tpb1fxt9YfU. https://youtu.be/Zj_dxbJpCqo.
 CHAPTER 6: Selecting Business-Level Video Credits
Strategies
Gregg Learning. (2018, June 12). Low cost
1.​ Section Video strategy [Video]. YouTube.
https://www.youtube.com/watch?v=-C0MQzIb7Y4
Five Competitive Strategies [02:50] &feature=emb_logo.
The video for this lesson explains the five generic
strategies and why some work better in some 3.​ Section Video
industries or conditions than others.
You can view this video here: Differentiation Strategy [04:28]
https://www.youtube.com/watch?v=xUW6_Nbe8d0 The video for this lesson discusses differentiation
&feature=emb_logo strategies.
You can view this video here:
Video Credits https://www.youtube.com/watch?v=NshI_qoaf7g&f
eature=emb_logo.
Gregg Learning. (2018, June 11). Five
competitive strategies [Video]. YouTube. Video Credits
https://www.youtube.com/watch?v=xUW6_Nbe8d0
&feature=emb_logo. Gregg Learning. (2018, June 13).
Differentiation strategy [Video]. YouTube.
2.​ Section Video https://www.youtube.com/watch?v=NshI_qoaf7g&f
eature=emb_logo.
Low Cost Strategy [03:20]
The video for this lesson describes the competitive 4.​ Section Video
approach of low cost strategy.
You can view this video here:
Focused Strategy [03:47]
https://www.youtube.com/watch?v=-C0MQzIb7Y4
&feature=emb_logo. The video for this lesson explains that focused
strategies concentrate on a narrow segment of the
total market.
You can view this video here:
 https://www.youtube.com/watch?v=cSMD6MoNeB CHAPTER 7: Innovation Strategies
o&feature=emb_logo.
1.​ Section Video

Video Credits The relationship between entrepreneurial

orientation and organizational performance [01:02]
Gregg Learning. (2018, June 14). Focused
The video for this lesson discusses the relationship
strategy [Video]. YouTube. between entrepreneurial orientation and organizational
https://www.youtube.com/watch?v=cSMD6MoNeB performance. You can view this video here:
https://youtu.be/Iru7IBqc3Vk.
o&feature=emb_logo.

5.​ Section Video Video Credits

The Oxford Review. (2018, December 16). The

Best-Cost Provider Strategy [03:29] relationship between entrepreneurial orientation
The video for this lesson discusses companies and organisational performance [Video]. YouTube.
https://youtu.be/Iru7IBqc3Vk.
that use best-cost strategies.
You can view this video here:
2.​ Section Video
https://www.youtube.com/watch?v=zOaMXfFHzw
Q&feature=emb_logo. Entrepreneurial Orientation [02:39]
The video for this lesson explains the importance of
entrepreneurial orientation.
Video Credits You can view this video here:
https://youtu.be/L6MqD5Hhs2U.

Gregg Learning. (2018, June 15). Best-Cost Video Credits

provider strategy [Video]. YouTube.
Tarlan Golkar. (2020, April 28). Entrepreneurial
https://www.youtube.com/watch?v=zOaMXfFHzw
orientation [Video]. YouTube.
Q&feature=emb_logo. https://youtu.be/L6MqD5Hhs2U.
 SECTION VIDEO COMPILATION
3.​ Section Video
CHAPTER 4
Innovation Strategy [04:16] 1.​ Intellectual Property
The video for this lesson explains innovation strategy. -​ Federallabs/FLC-Federal Laboratory Consortium
You can view this video here: for Technology Transfer
https://youtu.be/B-tY6citUHw. 2.​ Value Chain Analysis
-​ Melissa A. Schilling
Video Credits
CHAPTER 5
Kuczmarski Innovation. (2016, May 17). Innovation 1.​ Business Strategy-SWOT Analysis
strategy [Video]. YouTube. -​ 365Careers/365 Financial Analyst
https://youtu.be/B-tY6citUHw. 2.​ Strategic Issues
-​ Gregg Learning/GreggU

CHAPTER 6
1.​ Five Competitive Strategies
-​ Gregg Learning/GreggU
2.​ Low Cost Strategy
-​ Gregg Learning/GreggU
3.​ Differentiation Strategy
-​ Gregg Learning/GreggU
4.​ Focused Strategy
-​ Gregg Learning/GreggU
5.​ Best-Cost Provider Strategy
-​ Gregg Learning/GreggU

CHAPTER 7
1.​ The relationship between entrepreneurial orientation and
organizational performance
-​ The Oxford Review
2.​ Entrepreneurial Orientation
-​ Tarlan Golkar
3.​ Innovation Strategy
-​ Kuczmarski Innovation
CHAPTER 4 (NOTES)

1.​ Intellectual Property - T2 simplifies licensing patents and sharing confidential

-​ Federallabs/FLC-Federal Laboratory Consortium information for mutual problem-solving and product
for Technology Transfer development.

Intellectual property (IP) - refers to creations or ideas developed by 2. Value Chain Analysis
individuals. -​ Melissa A. Schilling
Examples of IP include:
1.​ designs
●​ Introduction to value chain analysis using the VRIO
2.​ processes
framework.
3.​ songs
●​ Value chains consist of various inputs and activities that create
4.​ logos
value at each stage.
5.​ discoveries
●​ Example of a value chain in the auto manufacturing industry,
6.​ symbols
including inputs like steel mill, a tire manufacturer and labor.
7.​ new plant varieties
Who in turn sells to dealerships and who in turn sells to
- IP ownership allows creators to control usage, sales, and profits
consumers.
from their work.
●​ Primary activities in a firm’s value chain may include:
- Protecting IP is crucial in a digital world where copying is easy.
1.​ product design
There are four main legal protections for IP:
2.​ Procurement of supplies
1.​ Patents - Cover inventions, new processes, machines, and
3.​ manufacturing
new ways of manufacturing.
4.​ Marketing and Sales
2.​ Copyrights - Protect art, music, writings, movies, and software.
●​ supported by secondary activities like
3.​ Trademarks - Safeguard unique branding elements like
1.​ HR and
business names, logos, slogans and mascots.
2.​ IT
4.​ Trade Secrets - Keep confidential information, such as
3.​ Finance, Accounting and Legal
manufacturing processes, formulas and compilation of
4.​ Research
information.
- While obtaining these protections may seem challenging, it is
beneficial and manageable.

Technology transfer (T2)

- helps negotiate the use, sharing and assigning of IP
- facilitates the negotiation and sharing of IP, enabling
collaboration between government and private sectors.
●​ Step 1: Identify value chain activities, which can vary by CHAPTER 5 (NOTES)
industry (e.g., pharmaceutical firms focus on R&D and clinical
1.​ Business Strategy-SWOT Analysis
trials).
-​ 365Careers/365 Financial Analyst
●​ Step 2: Identify strengths and weaknesses in the value chain
activities (e.g., strengths in R&D may include exceptional
scientists and patented technology). ●​ Strategy analysis consists of two main branches:
●​ Step 3: Analyze strengths using the VRIO framework: 1.​ Internal
●​ VRIO 2.​ External environment analysis.
-​ VALUABLE ●​ SWOT Analysis (Strengths, Weaknesses, Opportunities,
-​ RARE Threats) - is a framework that allows us to combine internal
-​ DIFFICULT TO IMITATE and external analysis.
-​ ORGANIZE TO CAPTURE VALUE ●​ Firms Internal Environment
●​ V: Valuable - Does it create value by reducing costs or 1.​ Strength
increasing customer willingness to pay? 2.​ Weaknesses
●​ R: Rare - Is it unique among competitors? ●​ Firms EXternal Environment
●​ I: Inimitable - Is it difficult for others to replicate? 1.​ Opportunities
●​ O: Organizational support - Is the infrastructure and 2.​ Threats
culture in place to leverage the resource? ●​ SWOT analysis can be applied to industries, companies,
●​ Example analysis of R&D strengths: product initiatives, policies, or people.
●​ Exceptional scientists: Sustainable competitive ●​ The framework helps visualize strengths and weaknesses and
advantage. identify potential threats and opportunities.
●​ Patented technology: Potential advantage, not ●​ Internal strengths and external opportunities are considered
sustainable. helpful, while internal weaknesses and external threats are
●​ Strong stage-gate process: Competitive parity. harmful.
●​ Exclusive relationship with R&D partner: Temporary ●​ Strengths: Core competencies and competitive advantages
advantage. (e.g., strong brand recognition).
●​ Step 4: Reassess strategic implications of our analysis: ●​ Weaknesses: Areas needing improvement that create
●​ Identify how to obtain resources to overcome disadvantages (e.g., higher cost structure).
weaknesses. ●​ Opportunities: Favorable external factors that can enhance
●​ Extend and defend temporary advantages. results and competitive positioning (e.g., new technology).
●​ Exploit and reinforce sustainable competitive ●​ Threats: External challenges that could harm the business
advantages. (e.g., entry of strong competitors with advanced technology).
●​ Emphasis on the importance of understanding advantages and
disadvantages for formulating a winning strategy.
2. Strategic Issues
-​ Gregg Learning/GreggU CHAPTER 6 (NOTES)
1.​ Five Competitive Strategies
-​ Gregg Learning/GreggU
●​ The course focuses on evaluating a company's external and
internal situations to aid managers in strategic
●​ The course focuses on understanding five generic competitive
decision-making.
strategies and their effectiveness in different industries and
●​ Strategic Issues - are found by pinpointing the things that
competitive conditions.
management needs to worry about.
●​ Issue - managers need to zero in on exactly what strategic ●​ According to Michael Porter, a firm may pursue one of five
issues company managers need to address. generic/competitive business-level strategies
●​ Challenges - The task here is to get a clear fix on exactly 1.​ broad cost leadership
what industry and competitive challenges confront the 2.​ broad differentiation
company, which internal weaknesses need fixing, and what 3.​ focused cost leadership
specific problems merit front-burner attention by company 4.​ focused differentiation
managers. 5.​ best cost strategies
●​ A FIVE competitive strategy
●​ Worry List - If the items on management's "worry list" are
1.​ LOW-COST STRATEGY
relatively minor, which suggests the company's strategy is
2.​ BROAD DIFFERENTIATION STRATEGY
mostly on track, company managers seldom need to go much
3.​ FOCUSED LOW-COST STRATEGY
beyond fine-tuning the present strategy.
4.​ FOCUSED DIFFERENTIATION STRATEGY
●​ Serious Problems - If, however, the issues and problems
5.​ BEST-COST PROVIDER STRATEGY
confronting the company are serious and indicate the present
●​ A competitive strategy
strategy is not well suited for the road ahead, the task of
-​ concerns the specifics of management's plan for
crafting a better strategy has got to go to the top of
competing and securing a competitive advantage.
management's action agenda.
-​ A company’s competitive strategy is its specific efforts
●​ Compiling a "worry list” of problems and issues creates an
to achieve a particular competitive advantage.
agenda for managerial strategy making.
●​ Key factors distinguishing competitive strategies:
●​ Market target: broad or narrow.
●​ Competitive advantage: linked to lower costs or
differentiation.
1.​ Low-Cost Provider Strategy:
●​ Achieves lower overall costs than rivals.
●​ Appeals to a broad spectrum of customers by
underpricing competitors.
 2.​ Broad Differentiation Strategy:
●​ Differentiates products/services from rivals.
●​ Striving for low-cost leadership is a competitive strategy in
●​ Appeals to a broad spectrum of buyers.
price-sensitive markets.
3.​ Focused Low-Cost Strategy:
●​ A company achieves low-cost leadership by being the lowest
●​ Concentrates on a narrow buyer segment or market
cost provider in the industry, not just among several low-cost
niche.
competitors.
●​ Competes by having lower costs and offering lower
●​ Successful low-cost providers have lower costs than rivals but
prices to niche members.
may not have the absolute lowest costs.
4.​ Focused Differentiation Strategy:
●​ Essential features and services must be included to avoid
●​ Concentrates on a narrow buyer segment or market
being perceived as offering little value.
niche.
●​ A low-cost leader’s basis for competitive advantage is lower
●​ Competes by offering customized attributes that better
overall costs than competitors achieved by eliminating
meet niche members' tastes and requirements.
non-essential activities or outperforming rivals in essential
5.​ Best Cost Provider Strategy:
activities.
●​ Provides customers with more value for their money.
●​ Two options for low-cost:
●​ Satisfies key quality, features, performance, or service
1.​ Use lower- cost edge to underprice competitors to
attributes while beating price expectations.
attract price-sensitive buyers and increase total profits.
●​ A hybrid strategy combining elements of low-cost and
2.​ Maintain prices to use the lower-cost edge to earn a
differentiation.
higher profit margin.
●​ It is important to understand what distinguishes the five
●​ A firm's cumulative costs across the value chain must be lower
generic strategies and why some work better than others.
than competitors to achieve a low-cost edge.
●​ Two Major avenues for achieving low-cost:
1.​ Performing essential value chain activities more
cost-effectively than rivals.
2.​ Revamping the firm's overall value chain to eliminate or
bypass some cost activities.
●​ A low-cost leadership is particularly powerful when:
1.​ Price competition is vigorous.
2.​ Products of rivals are readily.
3.​ There are few ways to achieve differentiation.
4.​ Buyers incur low costs in switching purchases.

2. Low Cost Strategy ●​ Pitfalls to avoid low-cost provider strategy:

-​ Gregg Learning/GreggU 1.​ Getting carried away with aggressive price
 2.​ Cutting and ending up with lower profitability 5.​ Uniqueness Drivers: These are activities or factors in the value
3.​ Relying on an approach to reduce costs that can be chain that significantly impact customer value and creating
easily copied by rivals differentiation. Managers can enhance differentiation by:
4.​ Becoming too fixated on cost reduction ●​ Seeking high-quality inputs
●​ A low-cost strategy achieves lower costs than rivals and ●​ Striving for innovation
appeals to a broad spectrum of customers, usually by ●​ Pursuing continuous quality improvement
underpricing rivals. ●​ Improving human resource management
●​ Enhancing customer service
6.​ Customer Value: Differentiation opportunities can exist in
activities all along an industry's value chain and particularly in
3. Differentiation Strategy activities and factors that meaningfully impact customer value.
-​ Gregg Learning/GreggU 7.​ Enhance Differentiation:
●​ Seeking out high-quality inputs
●​ Striving for innovation
●​ Pursuing continuous quality improvement
1.​ Definition of Differentiation Strategy: This strategy involves ●​ Emphasizing human resource management Improving
offering unique product or service attributes that appeal to a customer service.
wide range of buyers find. 8.​ Value can be delivered to customers:
2.​ Succeed through Differentiation: A company attempting to ●​ Include product attributes and user features
succeed through differentiation must study buyers' needs and ●​ Incorporate features that improve performance
behavior carefully to learn what buyers think has value and ●​ Incorporate features that enhance satisfaction
what they are willing to pay for. 9.​ Market Conditions Favoring Differentiation: Differentiation
3.​ Successful Differentiation allows firm to: strategies are most effective in markets where:
-​ Command a premium price ●​ Buyer needs and uses are diverse
-​ Increase unit sales ●​ Product or service that have value to buyers
-​ Gain buyer loyalty to its brand ●​ Few rival firms are following similar approach
4.​ Examples of Differentiation: Companies can differentiate ●​ Technological change is fast-paced
through various means, such as: 10.​Challenges and Risks: Differentiation strategies can fail if:
●​ Unique taste (e.g., Red Bull, Doritos) ●​ Unique attributes are easily copied
●​ Multiple features (e.g., Microsoft Office, Apple iPhone) ●​ Buyers do not perceive value in the unique features
●​ One-stop-shop (e.g., Home Depot, Amazon) ●​ Companies overspend on differentiation efforts,
●​ Superior service (e.g., Ritz Carlton, Nordstrom) eroding profitability
●​ Engineering and design (e.g., Mercedes-Benz, BMW) ●​ A low-cost provider can offer a basic product that
●​ Product reliability (e.g., Whirlpool, Bosch) satisfies buyers without the need for additional
●​ Quality manufacturing (e.g., Michelin, Toyota) features.
●​ Technological leadership (e.g., 3M) 11.​A low-cost provider strategy can always defeat differentiation
strategy when buyers satisfied with a basic product.
 5. Best-Cost Provider Strategy
-​ Gregg Learning/GreggU

4. Focused Strategy
●​ Best cost strategies target value-conscious buyers seeking
-​ Gregg Learning/GreggU
good products/services at economical prices.
●​ These strategies combine low-cost provider and differentiation
1. Definition of Focused Strategies:
approaches.
●​ Concentration on a narrow market segment.
●​ The goal is to provide more value for money by meeting buyer
●​ Distinction from low-cost leadership and broad differentiation
expectations on quality and performance while offering lower
strategies.
prices than rivals.
2. Identifying Niche:
●​ Successful implementation requires:
●​ Can be defined by geographic uniqueness or special product
●​ Superior value chain configuration to minimize
attributes.
non-value-adding activities.
3. Advantages of Focused Strategy:
●​ High efficiency in managing value chain activities.
●​ Significant benefits from concentrating competitive efforts on a
●​ Core competencies that allow for low-cost
specific market niche.
incorporation of differentiating attributes.
4. Types of Focused Strategies:
●​ A best cost provider can underprice rivals with similar upscale
1. Focused Low-Cost Strategy:
attributes while maintaining profitability.
●​ Aims for a competitive advantage by offering lower
●​ This strategy is most effective in markets where product
costs and prices in the target market niche.
differentiation is common and there is a significant number of
2. Focused Differentiation Strategy:
value-conscious buyers.
●​ Offers tailored products or services to meet the unique
●​ Best cost providers typically position their products in the
preferences of a well-defined buyer group.
middle of the market, offering either medium quality at
5. Niche Market Focus:
below-average prices or high quality at average/slightly higher
1. Strategies tailored to serve specific market segments rather
prices.
than general markets.
●​ Vulnerabilities include lacking necessary core competencies
2. Differentiation may occur across various markets and
and efficiencies, leading to potential market squeeze between
segments.
low-cost and high-end differentiators.
●​ A competitive strategy should align with the company's internal
situation and leverage its valuable resources and
competencies.

CHAPTER 7 (NOTES)
 conducted of sample 609 businesses by researchers from four
1.​ The relationship between entrepreneurial orientation and universities in Spain, Portugal and the United States.
organizational performance ●​ The research briefing will be of the express interest to anyone
-​ The Oxford Review interested in entrepreneurial activity and business
performance.
●​ The Entrepreneurial Orientation of an organisation refers to a ●​ There is a growing amount of evidence to show that
strategic set of outlooks including the organisation’s: entrepreneurial qualities can boost the performance of any
1.​ Inclination towards risk-taking organisation or service, which has given rise to the idea of the
2.​ Tendency for building and pursuing a competitive intrapreneur or an individual with entrepreneurial attributes
advantage who is employed, rather than running their own business.
3.​ Bias towards proactivity ●​ As a result an increasing amount of research effort is focusing
4.​ Its level of dependency on innovation on exactly what it is that makes a difference for organisations.
●​ An organisation’s entrepreneurial orientation relates to the ●​ Essentially, entrepreneurship is the process of creating value
strategic stance and set of attitudes it uses to go about its from often hidden opportunities.
day-to-day business. ●​ This value can be in any form and is essentially seen as an
●​ Previous studies found that organisations that have higher innovative and creative process.
entrepreneurial orientation display a set of specific ●​ In market oriented organisations entrepreneurial behaviours
entrepreneurial habits and behaviours that pervade the entire are the critical success factors that develop an organisation’s
organisation. competitive advantage.
●​ These habits and behaviours stem from the orientation and ●​ There has been huge amount of Interest in the concept of
thinking of the management and leadership of the entrepreneurial orientation and its ability to increase, for
organisation. example:
●​ The research briefing will be really useful for anyone interested -​ Innovation and innovative performance
in developing entrepreneurial attributes within an organisation. -​ Behaviours Creativity Sales performance
Experimentation
-​ Risk-taking General individual
2.​ Entrepreneurial Orientation -​ Organisational performance Speed of response
-​ Tarlan Golkar Organisational agility
-​ Adaptive Capacity
●​ A number of previous studies have shown that entrepreneurial ●​ Recently, studies have started to show that the relationship
orientation is a critical ingredient in overall business between entrepreneurial orientation and its outcomes is
performance for most organisations. complex and anything but direct and linear. In other words,
●​ The new (2019) study looking at the impact of five entrepreneurial orientation on its own is not a sufficient and
entrepreneurial orientation dimension on business necessary factor for many of the outcomes observed.
performance and whether or not socio emotional wealth ●​ The impact entrepreneurial orientation has appears to be
factors have an impact on business performance, has been facilitated by a number of factors.
●​ Previous studies have found that: resources particularly ● Correlation: Entrepreneurial orientation is positively linked to
financial resources transformational leadership resource organisational performance metrics.
planning, organisation and adaptation capability organisational
strategic learning, including absorptive capacity for the rate at 3.​ Innovation Strategy
which individuals and the organisation can learn all appear to -​ Kuczmarski Innovation
have an effect on the impact that entrepreneurial orientation
has.
●​ Many companies lack a clear innovation strategy.
●​ Senior leaders often present a list of ongoing innovation
● Definition: A strategic set of outlooks including risk-taking
projects instead of a strategic framework.
and proactive approaches toward Innovation.
●​ Four key components of an effective innovation strategy:
○​ Innovation Vision: Define the overall purpose of
Competitive Advantage:
innovation (e.g., market access, competitive
advantage, business enhancement, disruptive
● Importance: Organisations build and pursue competitive
technology).
advantages through firm-specific strategies and behaviours.
○​ Financial Revenue Gap: Identify the revenue growth
target and determine how much will come from
Innovation Dependency:
innovations versus other sources (e.g., price increases,
acquisitions).
● Necessity: A high level of creativity and innovation is
○​ Screening Criteria: Establish criteria for evaluating
essential for achieving superior organisational performance.
new ideas based on customer fit, strategic fit, financial
viability, technical feasibility, and market attractiveness.
Strategic Attitudes:
○​ Investment Levels: Determine the resources (people
and financial) allocated to innovation and the expected
● Influence: Management’s attitudes shape the entrepreneurial
returns over a five-year period.
orientation, affecting decision-making and organisational
●​ These components create a roadmap for innovation that can
behaviour.
be communicated throughout the organization.
●​ Senior leaders should treat the innovation strategy as a
Entrepreneurial Habits:
"declaration of innovation," similar to the Declaration of
● Impact: Higher levels of entrepreneurial orientation lead to
Independence, by formally endorsing it to demonstrate
distinctive behaviours permeating throughout the organisation.
commitment and consensus.
●​ This endorsement helps employees understand
Research Implications:
management's dedication to innovation.
● Application: Findings can help organisations develop
entrepreneurial attributes more effectively.

Performance Link:
CHAPTER 6 -​ where the firm attempts to offer a hybrid of both lower cost
and differentiated products or services, combining the two
●​ A generic, business-level strategy basic strategies.
-​ is also called its generic competitive strategy ●​ Business-level strategy
-​ because it defines how a firm competes head-to-head -​ addresses the question of how a firm will compete in a
against similar products and services in the particular industry
marketplace -​ examine how firms compete in a given industry
●​ According to Michael Porter, a firm may pursue one of five ●​ A generic business-level strategy
generic/competitive business-level strategies. -​ is a general way of positioning a firm within an industry
1.​ broad cost leadership ●​ Firms compete on two general dimensions
2.​ broad differentiation 1.​ source of competitive advantage (cost or
3.​ focused cost leadership differentiation)
4.​ focused differentiation 2.​ scope of operations (broad or narrow)
5.​ best cost strategies ●​ Cost leadership
●​ broad cost leadership or broad differentiation strategy -​ is an effective business-level strategy to the extent that
-​ the target market for the product or service is broad, a firm offers low prices, provides satisfactory quality,
meaning most people who buy within that industry and attracts enough customers to be profitable.
●​ focused ●​ Differentiation
-​ that target market is narrow, a niche market, and not -​ can be an effective business-level strategy to the
meant for most people in the industry extent that a firm offers unique features that convince
1. broad cost leadership customers to pay a premium for their goods and
-​ offers the lowest price in the market for that product or services.
service. It appeals particularly to price sensitive customers. ●​ Focused cost leadership
2. broad differentiation strategy -​ requires competing based on price to target a narrow
-​ offer something unique that differentiates their product or market.
service from others. Typically this uniqueness adds cost and ●​ Focused differentiation
value to the product or service, allowing the company to -​ requires offering unique features that fulfill the
charge more. demands of a narrow market
3. focused cost leadership ●​ Focus strategies
-​ firm attempts to provide the lowest cost to a narrow, niche -​ can be effective business-level strategies to the extent
target market that a firm can match their goods and services to
4. Focused differentiation specific niche markets.
-​ provides unique or differentiated products or services to a
narrow, niche target market.
5. best cost ●​ Best-Cost Strategy
 -​ Firms that charge relatively low prices and offer ●​ Innovativeness
substantial differentiation -​ is the tendency to pursue creativity and
●​ Stuck in the Middle experimentation.
-​ if it does not offer features that are unique enough to -​ aimed at developing new products, services, and
convince customers to buy its offerings and its prices processes.
are too high to effectively compete based on price. ●​ Proactiveness
Firms that are stuck in the middle generally perform -​ tendency to anticipate and act on future needs rather
poorly because they lack a clear market or competitive than reacting to events after they unfold.
pricing. ●​ proactive organization
-​ one that adopts an opportunity-seeking perspective
CHAPTER 7 -​ Such organizations act in advance of shifting market
demand and are often either the first to enter new
●​ entrepreneurial orientation markets or “fast followers” that improve on the initial
-​ stimulates a firm toward innovation, improving its efforts of first movers
products and services and launching new product ●​ Risk Taking
lines. -​ refers to the tendency to engage in bold rather than
●​ intrapreneurship cautious actions
-​ Entrepreneurship within an organization ●​ Innovation
●​ Entrepreneurial orientation (EO) -​ can be a key strategy to stay ahead of the competition
-​ is a key concept when executives are crafting ●​ blue ocean strategy
strategies in the hopes of doing something new and -​ involves creating a new, untapped market rather than
exploiting opportunities that other organizations competing with rivals in an existing market
cannot exploit. ●​ Innovation can be classified into four types:
-​ EO refers to the processes, practices, and 1.​ Incremental Innovation
decision-making styles of organizations that act 2.​ Disruptive Innovation
entrepreneurially 3.​ Architectural Innovation
●​ Any organization’s level of EO can be understood by 4.​ Radical Innovation
examining how it stacks up relative to three dimensions: ●​ The type of innovation is dependent on two factors:
1.​ Innovativeness 1.​ Market – does the innovation create a new market, or
2.​ Proactiveness address the existing market?
3.​ risk taking 2.​ Technology – does the innovation use a new
●​ Entrepreneurial orientation (EO) is measured at: technology or an existing technology?
-​ both the organizational and the individual levels.
 ●​ Product Life Cycle
●​ Incremental innovation -​ The four stages are:
-​ can be described as making improvements on an 1.​ Introduction: The product is launched, with the
existing product or service. hopes that it catches on. Sales are low.
-​ Example: 2.​ Growth: The product catches on, and sales
1.​ Apple Iphone increase with time. Competitors jump in, but the
2.​ Gillete rivalry among competitors is not really strong
3.​ Coca-Cola yet, and there are plenty of sales for all.
●​ Disruptive Innovation 3.​ Maturity: Sales begin to level out, growth slows,
-​ occurs when a new product or service engages the and competition increases. Shake-out occurs,
existing market with a new technology. with some competitors leaving the market or
-​ occur when firms introduce offerings that are so unique being acquired by others.
and superior that they threaten to replace traditional 4.​ Decline: Sales start declining. More
approaches. consolidation occurs, with firms looking for exit
-​ Example: strategies. A few firms remain.
1.​ Smartphone - touchscreen ●​ Crossing the Chasm
2.​ Netflix - streaming service -​ When a new technology is launched, often there are
●​ Architectural Innovation technology innovators/enthusiasts who will purchase
-​ occurs when new products or services use existing the new technology to check it out.
technology to create new markets and/or new ●​ four commonly used cooperative moves used by firms:
consumers that did not purchase that item before. 1.​ Joint Ventures
-​ Example: 2.​ Strategic Alliances
1.​ Smartwatch 3.​ Mergers and Acquisitions
●​ Radical Innovation 4.​ Internal Development
-​ When new products or services are developed using ●​ Joint Ventures
new technology that open up new markets, -​ a cooperative arrangement that involves two or more
-​ Example: organizations with each contributing to the creation of a
1.​ new entity
●​ Footholds ●​ Strategic Alliances
-​ are useful for rock climbers looking for sure footing to -​ a cooperative arrangement between two or more
ascend a difficult mountain, as well as firms hoping to organizations that does not involve the creation of a
gain positions in new markets. new entity
-​ In business, a foothold is a small position that a firm ●​ Mergers and Acquisitions
intentionally establishes within a market in which it -​ Two firms decide to combine into one entity, often
does not yet compete. gaining strength in the market
●​ Internal Development
-​ If a firm wants to add a new product or service line,
rather than acquire that expertise by buying a
company, the firm can develop that capability
themselves.
●​ Multi-point competition
-​ a firm faces the same rival in more than one market.
●​ fighting brand
-​ is a lower-end brand that a firm introduces to try to
protect the firm’s market share without damaging the
firm’s existing brands.
●​ Co-location
-​ refers to a situation when goods and services offered
under different brands are located very close to each
other.
-​ Example: A fast food restaurant located inside a
Walmart or a gas station, or a coffee shop inside a
grocery store
●​ Co-opetition
-​ is a term that refers to the blending of competition and
cooperation between two firms
-​ Example:
1.​ Pfizer and BioNTech
2.​ Amazon and smaller vendors