Encyclopedia strategic management, Terms and Definitions

Encyclopedia Strategic Management (255 Terms) Powered by www.drawpack.com; All rights reserved.

Management
A to Z Keyword Definition
Topic

Strategic This means telling people about how effective your individuals or teams are at delivering services. Usually, this means
A Management
Accountability
providing information (giving an account of your performance), and being held to account

Strategic These are sets of actions (usually written down) that help you to get results. A good action plan covers who will do what, and
A Management
Action plans
when they will do it; what resources they will use; and how you will judge their success.

Strategic
A Management
Agency theory A theory that deals with the use of financial incentives to motivate workers.

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
Strategic
A Management
Aim 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.

Appraisals are usually used in terms of staff management. They are regular reviews of individual or team performances and
Strategic Appraisal and staff are used to monitor achievement of targets and to agree new targets. Appraisals may be linked to pay. It is the people
A Management development themselves who improve performance, not systems or processes, so performance management needs to include appraisal
and staff development.

Strategic Attractiveness- In the attractiveness-strength matrix, each business's location is plotted using quantitative measures of long-term industry
A Management Strength Matrix attractiveness and business strength/competitive position.

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A term used to describe e Business applications in which two or more business partners (separate companies) actively
Strategic B2B—Business-to-
B Management Business
collaborate with one another, sharing information to enhance their overall effectiveness; see also B2C, B2E, Collaboration, e
Procurement, and Supply Chain Management.

A term used to describe e Business applications in which a company does business over the internet with its customers by
Strategic B2C—Business-to-
B Management Customer
personalizing their web sites and allowing for cross selling and up selling; see also B2B, CRM, Cross Selling, Personalization,
and Up Selling.

Strategic B2E—Business-to- A term used to describe intranet portals in which employees are able, through a single point-of-entry, to access their HR
B Management Employee records, payroll history, and other corporate information relevant to them as individual employees; see also Portals.

Strategic Backward (upstream)
B Management integration
Input sources are brought into the firm.

Strategic
B Management
Barriers to entry Factors that reduce or impede entry into an industry.

Strategic
B Management
Barriers to exit Factors that impede the exit of a firm from an industry.

Strategic 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
B Management
Baseline
target levels.

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This is a collection of indicators that all refer to a particular service. Usually these will form a balanced set. If you are monitoring
Strategic
B Management
Basket of indicators 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.

Strategic Benchmarking has proven to be a potent tool for learning which companies are best at performing particular activities and then
B Management
Benchmarking
utilizing their techniques (or "best practices") to improve the cost and effectiveness of a company's own internal activities.

Attributes of a product that form the basis on which a firm can differentiate itself. Attributes can include the characteristics of
Strategic
B Benefit drivers the product itself, service characteristic, characteristics of product sale or delivery, characteristics that shape consumers’
Management perceptions and characteristics that affect the subjective image of the product.

Best Value
Strategic These outline authorities' approaches (progress, successes and other issues) to best value and general improvement,
B Management
Performance Plans
including performance information.
(BVPPs)

Strategic
B Management
Best-Value Frontier The value-map reference line connecting products that offer the best performance in each price range.

Strategic A condition where the existing firms in the industry firm need not undertake any entry-deterring strategies to deter entry by
B Management
Blockaded entry
outsiders.

The central role of the board of directors in the strategic management process is (1) to critically appraise and ultimately
Strategic
B Management
Board of Directors 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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BPI allows for an automated inter-company exchange of processes in an EAI or middleware environment. A business process
Strategic BPI - Business
B Management Process Integration
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.

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
Strategic BPM - Business long-lived, multi-step information request or transaction that spans multiple applications and people in one or more companies.
B Management 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.

Strategic
B Management
Business Intelligence The art of knowing your customers better than they do themselves.

Strategic A company's business model deals with whether the revenue-cost-profit economics of its strategy demonstrate the viability of
B Management
Business Model
the enterprise as a whole.

Strategic A plan that determines how a strategic plan will be implemented. It specifies how, when, and where a strategic plan will be put
B Management
Business planning
into action. Also known as tactical planning.

Strategic Business strategy concerns the actions and the approaches crafted by management to produce successful performance in
B Management
Business Strategy
one specific line of business; the central business strategy issue is how to build a stronger long-term competitive position.

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Strategic
B Management
Buyer power The ability of individual customers to negotiate purchase prices that extract profits from sellers.

Strategic A cash cow business is a valuable part of a diversified company's business portfolio because it generates cash for financing
C Management
Cash Cow
new acquisitions, funding the capital requirements of cash hogs, and paying dividends.

Strategic A cash hog business is one whose internal cash flows are inadequate to fully fund its needs for working capital and new capital
C Management
Cash Hog
investment.

The process of working jointly between two or more different corporations by sharing information such as the availability of
Strategic
C Management
Collaboration supplies, the inventory of products, their shipment status, forecasts, replenishment schedules, etc.; see also Supply Chain
Management and Supply Chain Visibility.

Strategic Company A company competence is the product of learning and experience and represents real proficiency in performing an internal
C Management Competence activity.

Strategic Competitive
C Management advantage
What a firm does better than its competitors. Characteristics that allow a firm to outperform its rivals.

Strategic Competitive
C Management 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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Strategic
C Management
Competitive strategy How a firm competes within a specific industry or market.

Strategic
C Management
Competitor analysis The competitive nature of an industry. It determines how a rival will likely react in a given situation.

Strategic Complementary
C Management enterprise
Enterprises for which increasing the output level of one also increases the output level of the other.

Strategic
C Concentration Focuses the business’s efforts and resources in one industry.
Management

Strategic Concentric
C Management diversification
Diversification into a related industry.

Strategic Conglomerate
C Management diversification
Diversification into an unrelated industry.

Strategic Constant returns to
C Management scale
The average cost per unit of output remains unchanged as total output increases.

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Strategic
C Consumer surplus The consumer’s perceived value or benefit of a product less the product’s purchase price.
Management

Strategic
C Management
Contestable markets Markets where profits are held to a competitive level. Due to the ease of entry into the market.

Strategic Contractual
C Management integration
Separate firms in the value chain are linked through contractual arrangements.

Strategic The central or major business of the company. The core business is formed around the core competency of the company.
C Management
Core business
Management of the company’s core business is central to any decision about strategic direction.

Core Competence
Strategic A core competence is something that a company does well relative to other internal activities; a distinctive competence is
C Management
and Distinctive
something a company does well relative to competitors.
Competence

Strategic Corporate culture refers to a company's values, beliefs, business principles, traditions, ways of operating, and internal work
C Management
Corporate Culture
environment.

Strategic Corporate Corporate intrapreneuring relies upon middle and lower-level managers and teams to spot new business opportunities,
C Management Intrapreneuring develop strategic plans to pursue them, and create new businesses.

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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
Strategic
C Management
Corporate plan 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).

Strategic Corporate
C Management Restructuring
Corporate restructuring involves making radical changes in the composition of the businesses in the company's portfolio.

Strategic Corporate strategy concerns how a diversified company intends to establish business positions in different industries and the
C Management
Corporate Strategy
actions and approaches employed to improve the performance of the group of businesses the company has diversified into.

Strategic One of the major strategies to achieve a competitive advantage; When pursuing a cost advantage, firms seek to attain lower
C Management
Cost advantage
costs while maintaining a perceived benefit that is comparable to competitors.

Strategic
C Management
Cost center An enterprise that has a manager who is responsible for cost performance and controls most of the factors affecting cost.

Strategic Critical success Those few things that must go well if a company is to succeed. Typically 20 percent of the factors determine 80 percent of the
C Management factors performance. The critical success factors represent the 20 percent. Also called key success factors.

A term used to describe an e Business application that enables customers to sell more effectively over the internet, thus
CRM—Customer reaching more potential customers (also known as enhancing their customer touch points); typical CRM modules include Call
Strategic
C Management
Relationship Center Automation, Sales Force Automation (forecasting, pipeline review, product availability, contact data bases),
Management 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.

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A term that describes the process of selling related, peripheral items to a customer over the internet; as an example, if a
Strategic
C Management
Cross Selling 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.

Strategic Cross-cutting These are indicators that measure a service where two or more organisations or teams within an organisation, are jointly
C Management indicators responsible for delivery.

Strategic Cross-Market Cross-market subsidization-supporting competitive offensives in one market with resources and profits diverted from
C Management Subsidization operations in other markets-is a powerful competitive weapon.

Strategic The collection of beliefs, expectations, and values learned and shared by the company’s members and passed on from one
C Management
Culture
generation to another.

Strategic Customer
C Management specialization
A targeting strategy in which the firm offers a variety of related products to a particular class of customers.

A measure of the value of a particular deal to the customer. Surplus is the difference between the fair price and the price
Strategic
C Management
Customer Surplus 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.

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
Strategic Customer Value marketing strategy (on product positioning, product improvements, new product development and launches, value
C Management Management (CVM) 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.]

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Strategic Occurs when an existing firm in the industry can keep an outside firm out of the industry by employing an entry-deterring
D Management
Deterred entry
strategy.

The difference in the worth (economic value) of benefits delivered by one product versus a reference product. It is equivalent to
Strategic
D Differential Worth the monetary difference between the two products’ positions on the fair-value line. The reference product can be the average
Management product (in the category or consideration set) or a specific competing product.

Strategic Differentiation Achieving a competitive advantage by seeking to offer a product of higher perceived value while maintaining costs that are
D Management advantage comparable to competitors.

Strategic Differentiation
D Management Strategy
The essence of a differentiation strategy is to be unique in ways that are valuable to customers and that can be sustained.

Strategic
D Management
Diffusion curve The rate over time at which innovations are copied by rivals.

The buying of supplies that go into the actual manufacturing of a product; as an example, if a customer is a builder of
Strategic airplanes, the buying of sheets of steel and plastic would constitute direct procurement; supply chain management concerns
D Management
Direct Procurement
itself with direct procurement (whereas e procurement is concerned with indirect procurement); see B2B, e Procurement,
Indirect Procurement, and Supply Chain Management.

Strategic Diseconomies of
D Management scale
The average cost per unit of output increases as total output increases.

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Strategic Distinctive
D Management competence
Special skills and resources that generate strengths that competitors cannot easily match or imitate.

Strategic
D Management
Diversification The process of a company moving into new products or enterprises.

Strategic Divestiture usually takes one of two forms-spinning a business off as an independent company or selling it to another
D Management
Divestiture
company.

Strategic
D Management
Dominant strategy A strategy that is the best decision for the firm, no matter what decision its competitor makes.

Industry conditions change because important forces are driving industry participants (competitors, customers, or suppliers) to
Strategic
D Management
Driving Forces alter their actions; the driving forces in an industry are the major underlying causes of changing industry and competitive
conditions.

The process of doing business over the internet; in general, there are three (3) kinds of e Business, B2B (business performed
Strategic between separate companies over the internet), B2C (business over the internet between a company and its customers), and
E Management
E Business
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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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
Strategic
E E Procurement purchasing choices, ―maverick‖ buying is drastically reduced and savings of 10-40% can result; the process within e
Management 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.

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
EAI - Enterprise
Strategic applications, but later realized the gains in linking multiple business processes. Companies built distributed computing
E Management
Application
environments, only to find a competitive advantage in expanding those applications to include external business partners. But
Integration 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.

Strategic A concept that represents the difference between the profits earned by investing resources in a particular activity, and the
E Management
Economic profit
profits that could have been earned by investing the same resources in the most lucrative alternative activity.

Strategic
E Management
Economic Value The worth (monetary value to the customer) of the benefits of an offering.

Strategic
E Management
Economics Cost savings.

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Strategic
E Management
Economies of density Cost savings that arise with a greater geographic density of consumers.

Strategic Economies of
E Management integration
Cost savings generated from joint production, purchasing, marketing or control.

Strategic
E Management
Economies of scale The average cost per unit of output decreases as total output increases.

Strategic Economies of Economies of scope arise from the ability to eliminate costs by operating two or more businesses under the same corporate
E Management Scope umbrella; the cost-saving opportunities can stem from strategic fit relationships anywhere along the businesses' value chains.

Strategic
E Management
Economies of size Fixed costs decline as output increases.

Strategic
E Management
Emergent strategy An unplanned strategy that emerge from within the organization.

Strategic Enterprise (Strategic
E In a farm operation, the production of a single crop or type of livestock, such as wheat or dairy. A ―responsibility‖ center.
Management Business Unit)

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Strategic
E Management
Enterprise strategy How an enterprise competes within a specific market or industry. Also called business or competitive strategy.

Strategic An entrepreneur sees change as normal and healthy. He/she is involved in searching for change, responding to it, and
E Management
Entrepreneur
exploiting it as an opportunity.

Strategic Environmental
E An analysis of the environmental factors that influence a company’s operations.
Management analysis

Strategic Environmental
E Management opportunity
An attractive area for a company to participate in where the company would enjoy a competitive advantage.

Strategic Environmental Managers can use environmental scanning to spot budding trends and clues of change that could develop into new driving
E Management Scanning forces.

Strategic An unfavorable trend or development in the company’s environment that may lead to an erosion of the company’s competitive
E Management
Environmental threat
position.

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
Strategic market category on the key buying factors. RI splits the key buying factors into two main categories, functional and emotional.
E Management
Equity Engine
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.

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A company’s financial/accounting system often augmented by Sales Analysis, Inventory Management, Billing, and Materials
Strategic ERP—Enterprise Resource Planning (MRP) Systems; leading ERP vendors include SAP, PeopleSoft, J D Edwards, Great Plains, and many
E Management Resource Planning others; many such vendors are ―web-enabling‖ their systems, allowing their users to utilize them over the internet from remote
sites (as in mySAP).

Strategic
E Management
Excess capacity The ability to produce additional units of output without increasing fixed capacity.

Strategic Systematic cost reductions that occur over the life of a product. Product costs typically decline by a specific amount each time
E Management
Experience curve
accumulated output is doubled.

Strategic A cost or benefit imposed on one party by the actions of another party. Costs are negative externalities and benefits are
E Management
Externalities
positive externalities.

The price for a product that customers are willing to pay, on average, for a specific level of performance. It is equivalent to the
Strategic
F Management
Fair Price 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.

A reference line on a value map that reflects how much customers are willing to pay, on average, for different levels of
Strategic
F Fair-Value Line performance. The fair-value line passes through the intersection of the average price and average benefit lines – a point of, by
Management definition, average value. All of the points on the fair-value line represent average value. See slope of fair-value line.

Strategic A zone on a value map representing customer value close to and spaced equally above and below the fair-value line. The
F Management
Fair-Value Zone
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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Strategic Firm (company) How a firm will reach its goals and achieve its vision using firm strengths to take advantage of environmental (market and other
F Management strategy business) opportunities.

Strategic
F Management
Firm vision The collection of statements listed below indicating the desired strategic future for the firm.

Strategic First mover
F Management advantage
The competitive advantage held by a business from being first in a market or first to use a particular strategy.

Strategic An approach that uses economic tools to analyze an industry. The five forces are internal rivalry, entry, substitute and
F Management
Five-forces analysis
complement products, supplier power, and buyer power.

Strategic A floor target is a national minimum performance standard that all relevant organisations must achieve, for example, in literacy,
F Management
Floor targets
numeracy and GCSEs.

Strategic
F Management
Focus strategy A targeting strategy that concentrates either on offering a single product or serving a single market segment or both.

Forward
Strategic
F Management
(downstream) Output buyers are brought into the firm.
integration

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Strategic Products and bundled services that sell at the lowest price in their performance range. If an offering provides both the lowest
F Management
Frontier Offerings
price and best performance, it dominates every other offering in the category.

The price for a product that would offer value to customers comparable to products selling at the lowest price in their
Strategic
F Management
Frontier Price 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.

Strategic
F Management
Full integration Where one firm has full ownership and control over all the value chain of a product.

Functional strategy concerns the managerial game plan for running a major functional activity or process within a business-
Strategic
F Management
Functional Strategy R&D, production, marketing, customer service, distribution, finance, human resources, and so on; a business needs as many
functional strategies as it has major activities.

Strategic Global competition exists when competitive conditions across national markets are linked strongly enough to form a true
G Management
Global competition
international market and when leading competitors compete head to head in many different countries.

Strategic
G Management
Goals General statements of what the firm want to achieve in reaching its vision.

Strategic A few councils use this to describe the link between the different plans within their organisation. This helps to make sure that
G Management
Golden thread
individuals' contributions are directly linked to overall objectives and strategies.

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Strategic 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
G Management
Goodness of the deal
that is less than the fair price (as determined by the product’s relative performance.)

Strategic A tendency of individuals to adopt the perspective of the group as a whole. It occurs when decision makers don’t question the
G Management
Group think
underlying assumptions.

Strategic Head-to-Head Value
H Management Comparison
A report or graph comparing the attribute performances and relative values for a target model versus a reference model.

The buying of materials required for the simple day-to-day functioning of a business (paper, pencils, printers, computers,
Strategic
I Indirect Procurement maintenance parts for repair [known as MRO—Maintenance, Repair, and Operations]); see B2B, Direct Procurement, and e
Management Procurement.

Strategic
I Management
Industry A group of firms producing identical or similar products.

Strategic Industry
I Management Concentration
The degree to which a few firms dominate an industry and control large market shares.

Strategic
I Management
Innovation A new way of doing things.

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Strategic Inputs are 'resources that contribute to production and delivery, or the resources (staff, materials and premises) employed to
I Management
Input
provide the service'. In other words, they are what go 'into' a service or activity.

Strategic
I Management
Intended strategy Planned strategy developed through the strategic planning process.

Strategic
I Management
Internal rivalry Competitiveness of firms within an industry.

Strategic
I Management
Internal scanning Looking inside the business and identifying strengths and weaknesses of the company.

International
Strategic A company is an international (or multinational) competitor when it competes in a select few foreign markets. It is a global
I Management
(multinational)
competitor when it has or is pursuing a market presence on most continents and in virtually all of the world's major countries.
company

Strategic A strategic business unit or enterprise that has a manager who is responsible for profit and investment performance and who
I Management
Investment center
controls most of the factors affecting revenues, costs, and investments.

The list of important benefit and cost attributes that customers evaluate and value when choosing among competing brands.
Strategic Key Buying Factors
K The list of KBFs will differ by product category, for example: computers – connectivity; retail banking – short queues; aircraft
Management (KBFs) engines – spare parts availability; candy and nuts – freshness; outsourcing – contract flexibility.

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Strategic Key Success Key success factors concern the product attributes, competencies, competitive capabilities, and market achievements with the
K Management Factors greatest direct bearing on company profitability.

Strategic Late mover The competitive advantage held by businesses that are late in entering a market. Late movers often imitate the technological
L Management advantage advances of other businesses or reduce risks by waiting until a new market is established.

Strategic
L Management
Learning curve The cost advantages that flow from accumulating experience and know-how over the life of a product.

Strategic
L Management
Limit pricing The practice whereby an existing firm in the industry can discourage entry by charging a low price.

Strategic The decision of whether a firm should produce a product or service within the firm or buy it. Usually relates to decisions
M Management
Make-or-buy decision
relating to upstream or downstream activities or business support activities.

Strategic Can be defined as narrowly as a specific place where buying and selling takes place or as broadly as the demand for a product
M Management
Market
or service.

Strategic
M Management
Market segment A group of consumers within a broader market who possess a common set of characteristics.

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Strategic
M Management
Market structure The number and size distribution of the firms in a market.

Computer software offered by Customer Value, Inc. used to analyze a product’s price, performance, and value position relative
Strategic Marketing War to competitors and to simulate actions to improve competitiveness. It takes a performance profile as input and creates the
M Management Room™ Software associated value map, value scorecard, and head-to-head value comparisons. The software contains a variety of analytical
tools for managing customer value.

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
Strategic Market-share market-share loss. Pricing on or near the best-value frontier will typically lead to market-share gain. Changing performance
M Management Strategy 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.)

Strategic Rather than just working towards a final objective or target, milestones outline 'steps' towards it. They help you to assess your
M Management
Milestones
progress along the way and to identify issues as they arise rather than at the end.

Strategic Minimum efficient
M Management scale
The smallest output for which unit costs are minimized.

Strategic
M Management
Mission An action statement of how the firm will achieve its vision.

Strategic A company's mission statement is typically focused on its present business scope-"who we are and what we do"; mission
M Management
Mission Statement
statements broadly describe an organization's present capabilities, customer focus, activities, and business makeup.

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Strategic Active monitoring is not just about receiving information; it also involves tackling the issues it raises, as well as making
M Management
Monitoring
decisions or re-organising resources or action plans.

Strategic Most Valuable Customers, or customer segments, providing the largest stream of profits over the relevant time horizon. Marketers target
M Management Customers customers that can provide the greatest discounted present value of future profits.

Multicountry (or
Strategic Multicountry (or multidomestic) competition exists when competition in one national market is independent of competition in
M Management
multidomestic)
another national market-there is no "international market," just a collection of self-contained country markets.
competition

Strategic 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
N Management
Net Value Advantage
price. If product A has a positive net value advantage over product B, we say that A is a better deal.

Strategic
N Management
Niche strategy A strategy serving a specialized part of the market.

Strategic Objectives are an organization's performance targets-the results and outcomes it wants to achieve. They function as yardsticks
O Management
Objectives
for tracking an organization's performance and progress.

Operating strategy concerns how to manage front-line organizational units within a business (plants, sales districts, distribution
Strategic
O Management
Operating Strategy centers) and how to perform strategically significant operating tasks (materials purchasing, inventory control, maintenance,
shipping, advertising campaigns).

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Strategic Operations
O Management management
Focuses on the performance and efficiency of the production process. It involves the day-to-day decisions of the business.

Strategic Opportunities and
O Strategic factors in the firm’s external environment are categorized as opportunities or threats to the firm.
Management threats

Strategic Organizational An organization's strategy deals with how to make management's strategic vision for the company a reality-it represents the
O Management Strategy game plan for moving the company into an attractive business position and building a sustainable competitive advantage.

Strategic This is the effect that our activities have on the community or other target group. It's important that activities make a difference
O Management
Outcome
and that we don't just do them for the sake of it.

Outputs are 'the goods and services produced by the organisation'. For example, they include how many bins a local council
Strategic
O Management
Output 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.

Strategic Basically, this means getting other people to look at what you are doing, ask questions and make suggestions. Questions can
P Management
Peer review
help you to make things clearer; look into what you could do differently; and check that you have left nothing out.

PIs measure how you are doing in a given activity. You will often see the terms 'performance indicators' and 'performance
Strategic Performance measures' both used to describe 'how well a service is performing against its objectives', or 'the measure of a[n] authority's
P Management indicator (PI) 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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Performance This can be 'managing the performance of an organisation or an individual' or 'what you do to improve and maintain good
Strategic
P Management
management performance '. It involves you understanding and acting on performance issues at each level of your organisation, from
(framework) individuals, teams and directorates, through to the organisation itself.

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
Strategic Performance helps you to monitor your services and products and allows organisations to identify good performance, learn from others, and
P Management measurement 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.

Strategic Performance A performance standard is a 'minimum acceptable level of performance, or the level of performance that is generally
P Management standards expected'.

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.
Strategic
P Management
Personalization 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.

An ongoing research and consulting activity focused on competitive marketing strategy and benchmarking using a business-
unit database. The research and benchmarking activity focuses on measuring metrics that track a business’s competitive
Strategic PIMS (Profit Impact position (relative overall quality/performance, market share, and capital intensity) and relating competitive position and market
P Management of Market Strategy) 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.

Strategic
P Management
Portal A single point-of-entry through the internet into a particular web site; see B2C, CRM, and Personalization.

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Strategic
P Management
Portfolio A group of strategic business units or enterprises within a firm that are managed as individual responsibility centers.

Strategic Each strategic business unit or enterprise is considered as an individual responsibility center for purposes of strategy
P Management
Portfolio analysis
formulation.

Strategic Portfolio The collective management of a firm’s individual strategic business units or enterprises and the resources across these
P Management management enterprises.

Strategic
P Management
Predatory act A strategy that increases profits by deterring entry or promoting exit of competitors.

Strategic
P Management
Predatory pricing Aggressiveness by a firm against its rivals with the intent of driving them out of business.

Strategic
P Management
Price The sum of money or goods asked for or given in exchange for something.

Strategic Setting different prices for different market sub-segments, pricing higher in sub-segments that perceive the most differential
P Management
Price Customization
worth in your product, and reducing price to appeal to other sub-segments according less worth to your product.

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Strategic The difference between the price of an offering and the price of a reference offering. Products that perform better than average
P Management
Price Differential
are often priced higher than the average price. Products that perform worse than average are often priced lower than average.

Strategic The selling price of the vendor's product minus the selling price of a reference product. It is the opposite of the price advantage
P Management
Price Premium
a vendor enjoys when selling at a price below the price of the reference product.

A database developed by Bradley Gale at Customer Value, Inc. containing value accounting metrics for more than 550
Strategic Price-Performance
P Management Database
products in more than 50 categories. It can be used to determine category value benchmarks and make cross-category
comparisons.

Strategic Price-Performance A table showing customer-perceived performance scores, attribute relative importance, and prices of major offerings in a
P Management Profile category for the major competitors in the market.

Strategic An enterprise that provides the foundation of the business. The success of the primary enterprise is critical to the success of
P Management
Primary enterprise
the business.

Strategic Priorities are issues that you consider more urgent than other things. Priorities can be national and set by the Government.
P Management
Priorities
They can also be local, agreed between local organisations or communities, or decided internally.

Strategic
P Management
Proactive Seek out opportunities and take advantage of them. Anticipate threats and neutralize them.

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The process of evaluating how much a product is worth. This is done by comparing the performance of the product against
Strategic comparable products on the market. The justified price for, say, product A will be the price of the competing products adjusted
P Management
Product Appraisal
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.

Strategic A model where product demand is low when it is introduced. The product then enters a period of rapid demand growth that
P Management
Product life cycle
gradually levels off and sometimes declines.

Strategic A strategic business unit or enterprise that has a manager who is responsible for profit performance and who controls most of
P Management
Profit center
the factors affecting revenues and costs.

Strategic
Q Management
Quasi-integration A firm that gets most of its requirements from an outside supplier who is under its partial control.

Strategic The real strategy of a business that is either an intended (planned) strategy of management or an emergent (unplanned)
R Management
Realized strategy
strategy from within the organization.

Strategic The amount of value captured by customers, calculated as the fair price of an offering minus its selling price. Products on the
R Management
Relative Value
frontier of a value map offer the greatest value to customers in their performance range.

Strategic Resource Strengths
R Management and Weaknesses
A company's resource strengths represent competitive assets; its resource weaknesses represent competitive liabilities.

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Strategic Firm-specific assets such as patents and trademarks, brand-name reputation, financial assets, trained labor force,
R Management
Resources
management capabilities and organizational culture that provide the basis for the firm’s profitability and competitiveness.

Strategic A strategic business unit or enterprise within a firm whose performance is evaluated separately and is held responsible for its
R Management
Responsibility center
contribution to the company’s mission and goals.

Strategic
R Management
Restructuring Selling off unrelated parts of a business in order to streamline operations and return to a core business.

Strategic Risk Management A framework developed to help identify the barriers, obstacles, threats and areas of vulnerability and provide the basis on
R Management Process which any subsequent issues and risks can be recorded, evaluated and controlled.

The planned and systematic approach used to identify, evaluate and control the whole range of business risks, which might
Strategic Risk Management, prevent a service or organisation from achieving its objectives. Think of it as making the most of new or developing issues and
R Management Definition 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).

Any performance management framework must be able to cope with change, such as restructuring or individuals leaving.
Strategic
R Management
Robust 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
Strategic SCM - Supply Chain
S crucial questions—Where can my company find the right materials at the best price (i.e. direct procurement)? When will those
Management Management 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.

Strategic
S Management
Secondary enterprise An enterprise that supports a primary enterprise and/or the mission and goals of the business.

Service Risk Risk management process, included as part of the service planning framework, to identify, evaluate and manage significant
Strategic
S Management
Assessment, Process service level and organisational issues and risks facing the service and council. (exercise could also highlight some further
or Exercise Corporate and Cross Cutting items).

Strategic Slope of Fair-Value
S Management Line
The amount of change in fair-value price per point of overall performance.

Strategic SMART (in respect of
S Management target setting)
Specific, Measurable, Action-orientated, Realistic and Timely.

Strategic
S Management
Stakeholder 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 As opposed to incremental change, step change is about making major changes in your services and activities within a limited
S Management
Step change
timescale.

Strategic Maneuvering yourself into a favorable position to use your strengths to take advantage of market and other business
S Management
Strategic
opportunities.

Strategic
S Management
Strategic alliance An agreement between two or more firms to collaborate on a business project or to share information.

Strategic Alternative courses of action that achieve business goals and objectives, by using firm strengths to take advantage of
S Management
Strategic alternatives
environmental opportunities.

Strategic
S Strategic audit A checklist of questions that provide an assessment of a company’s strategic position and performance.
Management

Strategic Strategic
S Management commitments
Decisions that have long-term business performance impacts and are difficult to reverse.

Strategic Strategic Cost Strategic cost analysis involves comparing how a company's unit costs stack up against the unit costs of key competitors
S Management Analysis activity by activity, thereby pinpointing which internal activities are a source of cost advantage or disadvantage.

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Strategic
S Management
Strategic decisions A series of decisions used to implement a strategy.

Strategic
S Management
Strategic factors Strategic issues expected to have a high probability of occurrence and impact on the business.

Strategic
S Management
Strategic fit Fit between what the environment wants and what the firm has to offer.

Strategic A set of firms within an industry that are similar. They are different from firms outside the group on one or more key
S Management
Strategic group
dimensions of their strategy.

Strategic Strategic Group
S Management Mapping
Strategic group mapping is a technique for displaying the different competitive positions that rival firms occupy in the industry.

Strategic A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective and concentrates its
S Management
Strategic Intent
competitive actions and energies on achieving that objective.

Strategic
S Management
Strategic issues Trends and forces which occur within the business or within the environment surrounding the business.

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The term strategic management refers to the managerial process of forming a strategic vision, setting objectives, crafting a
Strategic Strategic
S Management Management
strategy, implementing and executing the strategy, and then over time initiating whatever corrective adjustments in the vision,
objectives, strategy, and execution are deemed appropriate.

Strategic Management’s failure to recognize the importance of responding to changes in the external environment because they are
S Management
Strategic myopia
blinded by their shared, strongly held beliefs.

Strategic Strategic objectives relate to outcomes that strengthen an organization's overall business position and competitive vitality;
S Management
Strategic Objectives
Financial objectives relate to the financial performance targets management has established for the organization to achieve.

Strategic A strategic plan consists of an organization's mission and future direction, near-term and long-term performance targets, and
S Management
Strategic Plan
strategy.

Strategic Strategic
S Management predisposition
A tendency of a company by virtue of its history, assets, or culture to favor one strategy over other possibilities.

Strategic
S Management
Strategic thinking How decisions made today will effect the firm years in the future.

A strategic vision is a roadmap of a company's future-providing specifics about technology and customer focus, the geographic
Strategic
S Management
Strategic Vision 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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Strategic A company's strategy consists of the combination of competitive moves and business approaches that managers employ to
S Management
Strategy
please customers, compete successfully, and achieve organizational objectives.

Strategic Compares performance with desired results and provides the feedback for management to evaluate results and take corrective
S Management
Strategy control
action.

Strategic Strategy execution deals with the managerial exercise of supervising the ongoing pursuit of strategy, making it work, improving
S Management
Strategy Execution
the competence with which it is executed, and showing measurable progress in achieving the targeted results.

Strategic The development of long-range plans for the management of environmental opportunities and threats in light of the business’s
S Management
Strategy formulation
strengths and weaknesses.

Strategic Strategy
S Management Implementation
Strategy implementation concerns the managerial exercise of putting a freshly chosen strategy into place.

Strategic Strengths and
S Management weaknesses
Strategic factors within the firm are categorized as strengths or weaknesses of the firm.

Strategic Supplementary
S Management 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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Strategic
S Management
Supplier power The ability of input suppliers to negotiate prices that extract profits from their customers.

The ability to ―see into‖ a company’s manufacturing and distribution process to determine where a product is in its total life
Strategic Supply Chain cycle (Is it still being manufactured? Has it been stored in a Distribution Center? Is it in transit between the Distribution Center
S Management Visibility 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.

Sustainable
Strategic A company that can expand its stock of strategic assets faster and at lower cost than rivals obtains sustainable competitive
S Management
Competitive
advantage.
Advantage

Strategic
S Management
Switching costs The costs incurred when a buyer switches from one supplier to another.

Strategic
S SWOT analysis Analysis of the strengths and weaknesses of the business and the opportunities and threats of the business’s environment.
Management

Strategic The purposeful and organized search for changes, and the systematic analysis of the opportunities these changes might offer
S Management
Systematic innovation
for economics and social innovation.

Strategic
T Management
Tactical decisions Decisions that are easily reversed and where impact persists only in the short run.

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Strategic 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
T Management
Tapered integration
from outside suppliers and/or sells the rest of its products to outside markers.

Strategic
T Management
Throughput The movement of inputs and outputs through a production process.

Strategic TQM entails creating a total quality culture bent on continuously improving the performance of every task and value chain
T Management
TQM
activity.

The price at which a good or resource is transferred from one enterprise (strategic business unit) to another within the firm.
Strategic
T Management
Transfer price 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.

Strategic Uniform delivered
U Management pricing
A single delivered price that a seller quotes for all buyers and in which the seller absorbs any freight charges.

Strategic A price that a seller quotes for pickup at the seller’s loading dock, and the buyer absorbs the freight charges for shipping from
U Management
Uniform FOB pricing
the seller’s plant to the buyer’s plant.

Strategic Unrelated A strategy of unrelated diversification involves diversifying into whatever industries and businesses hold promise for attractive
U Management Diversification financial gain; exploiting strategic-fit relationships is secondary.

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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
Strategic
U Up Selling suggestion—―Thank you for your order. You have just selected an outstanding set of golf clubs. However, you might be
Management 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.

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
Strategic
V Value Accounting with Value Accounting and the Value Scorecard.‖] Customer-perceived value analyses help a product team to assess its
Management 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.

Strategic
V Management
Value Chain A company's value chain identifies the primary activities that create value for customers and the related support activities.

Strategic
V 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.

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
Strategic
V Value Map performance-for-price in the category. CVI’s Marketing War Room software contains value mapping tools that make it easy for
Management 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.)

Strategic
V 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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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
Strategic
V Management
Value Proposition 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.

Strategic An approach to selling that attempts to quantify to a customer the economic value, or monetary worth, of your product’s
V Management
Value Selling
performance advantages versus competing products.

A technique for setting prices that recognizes the relative economic value, or worth to customers, associated with a brand’s
Strategic features and performance. Worth is calculated by looking at the brand’s comparative strengths and weaknesses on the key
V Management
Value-Based Pricing
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.

A visual summary of the key elements of value-based pricing. The chart shows the development of a fair-price, starting from a
Strategic Value-Based Pricing reference price (typically a market average) and adjusted upward or downward by performance differences and differences in
V Management Chart 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.

The Marketing War Room Software feature that automatically updates associated value maps, value scorecards, and head-to-
Strategic Value-Strategy
V Management Simulator™
head 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.

Strategic
V Management
Vertical chain The process that begins with the acquisition of raw materials and ends with the distribution and sale of finished goods.

Strategic
V 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
V Vertical integration The process in which either input sources or output buyers of the firm’s products are moved inside the business.
Management

Strategic
V Management
Vertical merger Firms in various stages of the value chain are linked together.

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
Strategic Voice of the
V Management Customer (VOC)
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.

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
Strategic
W Management
Web Services 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.

Strategic
W Management
Worth The economic value of the benefits associated with an offering, as perceived by the average customer in the category.

Page 38 of 38

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