Competition
Firms in an industry can either have a competitive disadvantage, competitive parity, competitive advantage, or continuous competitive advantage.
Firms in an industry can either have a competitive disadvantage, competitive parity, competitive advantage, or sustained competitive advantage.
The VRIO framework stands for Valuable, Rare, Imitative, and Organized to capture value.
The VRIO framework stands for Valuable, Rare, Inimitable, and Organized to capture value.
Industry analysis is important because industry effects explain about 20% of firm performance, while the business cycle and unexplained variance explain about 10% of firm performance.
Industry analysis is important because industry effects explain about 20% of firm performance, while the business cycle and unexplained variance explain about 25% of firm performance.
There are four main ways of measuring competitive advantage: accounting metrics, economic value creation, shareholder value creation, and stakeholder value creation.
There are three main ways of measuring competitive advantage: accounting metrics, economic value creation, shareholder value creation.
Firms might be incentivized to remain in unattractive industries because of isolating mechanisms that make it hard for them to leave.
Firms might be incentivized to remain in unattractive industries because of exit barriers that make it hard for them to leave.
In the Five Forces model, competition in an industry is high when the forces are weak.
In the Five Forces model, competition in an industry is high when the forces are strong.
In the RBV, resource immobility describes the idea that once resources are committed to a specific project it is difficult for firms to redeploy them.
In the RBV, resource immobility describes the idea that resources do not move easy between firms.
An industry's suppliers can establish switching costs and operate in a consolidated industry. We can deduce that Supplier Power is likely moderate.
An industry's suppliers can establish switching costs and operate in a consolidated industry. We can deduce that Supplier Power is likely high.
Producer surplus describes the leftover inventory that does not generate economic value.
Producer surplus describes the firm's share of economic value creation.
Kyle's Crunch is trying to copy the strategy of Mike's Muesli, which relies on deep connections with suppliers and internal employees. Kyle has a hard time duplicating this because Mike's strategy utilizes resource heterogeneity.
Kyle's Crunch is trying to copy the strategy of Mike's Muesli, which relies on deep connections with suppliers and internal employees. Kyle has a hard time duplicating this because Mike's strategy utilizes social complexity.
Firms can establish mobility barriers to prevent new competitors entering their industry.
Firms can establish entry barriers to prevent new competitors entering their industry.
In the value chain analysis, primary activities are performed within the firm and support activities are performed by external partners.
In the value chain analysis, primary activities directly add value and support activities indirectly add value.
In the Five Forces, Buyers are the consumers of an industry's products.
In the Five Forces, Buyers are not necessarily the consumers of an industry's products.
Return on invested capital (ROIC) captures both dividends and stock appreciation.
Total return to shareholders captures both dividends and stock appreciation.
Return on invested capital (ROIC) captures net profits / invested capital.
In the value chain analysis, Operations, R&D, and Customer Service are all primary activities.
In the value chain analysis, Operations and Customer Service are all primary activities. R&D is a support activity.
Non-price competition typically lowers industry profitability, because it relies on hard-to-manage intangible resources.
Price-based competition is typically the most destructive to industry profitability.
From a core competencies perspective, resources are anything useful the firm owns or does.
From a core competencies perspective, resources are any assets the firm can draw on to craft/execute strategy.
In an oligopoly industry structure, firms have some pricing power, meaning they often use price-based competition.
In an oligopoly industry structure, firms have some pricing power, meaning they can raise prices without losing customers.
The balanced scorecard evaluates a firm's relationship with customers and shareholders, how it creates value, and what resources it uses/needs.
The balanced scorecard evaluates a firm's relationship with customers and shareholders, how it creates value, and what core competencies it uses/needs.
When using the AFI framework, each step should be completed in sequence. Each step should be reviewed quarterly or biannually.
When using the AFI framework, each step should be completed in sequence. Each step should be reviewed continually.
Firms tend to compete most fiercely with firms in different strategic groups.
Firms tend to compete most fiercely with firms in the same strategic group.
Mobility barriers help sustain a firm's competitive advantage by preventing rivals from competing their advantages away.
Isolating mechanisms help sustain a firm's competitive advantage by preventing rivals from competing their advantages away.
Industry convergence happens when a fragmented industry rapidly consolidates. It is often caused by technological advances.
Industry convergence happens when unrelated industries begin to satisfy the same customer need. It is often caused by technological advances.
Kyle's Crunch yields a 6% profit margin operating in the granola industry, which averages a 4% profit margin. Kyle's smarter classmate Reed launched a firm in biotech, achieving a 28% profit margin. Kyle's Crunch therefore operates at a competitive disadvantage.
Kyle's Crunch yields a 6% profit margin operating in the granola industry, which averages a 4% profit margin. Kyle's smarter classmate Reed launched a firm in biotech, achieving a 28% profit margin. Kyle's Crunch therefore operates at a competitive advantage.
Dr. Stockdall's office is in Cameron 200-H, and his office hours are from 10-11:30 Mondays and Wednesdays. He's usually there from 9:30-12 though.
Dr. Stockdall's office is in Cameron 200-H, and his office hours are from 10-11 Mondays and Wednesdays. He's usually there from 9:30-12 though.