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7 Cards in this Set
- Front
- Back
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Strategy
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the actions that managers take to attain the goals of the firm
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Firms need to pursue strategies that increase ____ and ___ ____.
To do this, a firm can... (4 things) |
Profitability, Profit Growth
1. Add value 2. Lower costs 3. Sell more in existing markets 4. Expand internationally |
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Profitability
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the rate of return that a firm makes on its invested capital (ROIC)
net profits/total invested capital |
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Profit Growth
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the percentage increase in net profits over time
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True or false: The industry in which a firm competes has a stronger
influence on the firm’s performance than do the choices managers make inside their organizations. |
True
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What properties of an industry determine performance? (5 things)
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– Economies of scale
– Barriers to market entry – Diversification – Product differentiation – Degree of concentration of firms in the industry (Almost like Porter's 5 Forces) |
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Industrial Organization (I/O) Model.
- What is its main concept? - Name the parts. |
Emphasizes the dominance of the external environment to determine strategy.
The External Environment Attractive Industry Strategy Formulation Assets and Skills Strategy Implementation Superior Returns EISfAsSiSr |
