Category: Uncategorized

The five forces model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy

Particularly when assessing investments in new venture firms, the most effective, and often the only, way to measure the performance of the firms and determine their viability as an investment option is to examine financial metrics such as returns on assets, and sales

An effective vision stretches and challenges people and can result in increased innovation.  This is illustrated by Apple’s CEO Steve Jobs, who was known to think bigger and differently than most people

To implement a firm’s strategies, the firm takes actions to enact each strategy with the intent of achieving strategic competitiveness and above-average returns

The local government with whom a firm interacts, the people who buy its products, and the contractors who supply raw materials are all part of a firm’s capital market stakeholders

All of a firm’s resources and capabilities have the potential to be the foundation for a competitive advantage

Examples of incremental innovations include iPads, Wi-Fi, and the web browser

The difference between average and above-average returns is that average returns are returns that an investor expects to earn from an investment as compared to other investments with similar stock prices, while above-average returns are in excess of expectations for similarly priced stocks

The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The CEO should understand that the task is not easy, largely because of inertia that can build up over time

The I/O and resource-based models contain many of the same steps. One clear difference between the two models is the resource-based model starts by looking at the internal strengths and weaknesses of a firm, while the I/O model begins with an examination of the external environment. Another key difference is the resource-based model identifies an attractive industry much earlier in the process than does the I/O model