Competition & Strategy

   - Definition: Analyzes the competitive forces within an industry to determine its attractiveness.

   - Forces: Threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products, and intensity of competitive rivalry.

   - Purpose: Helps in identifying opportunities and threats in the industry environment.

   - Cost Leadership: Striving to be the lowest-cost producer in the industry.

   - Differentiation: Creating a unique product or service that is valued by customers.

   - Focus: Concentrating on a specific market segment or niche.

   - Definition: Breaks down a firm's activities into primary and support activities to understand the sources of competitive advantage.

   - Primary Activities: Inbound logistics, operations, outbound logistics, marketing and sales, service.

   - Support Activities: Firm infrastructure, human resource management, technology development, procurement.

- Stages: Introduction, growth, maturity, decline.

   - Implications: Strategies vary based on the stage of the industry life cycle.

   - Definition: The ability of a firm to outperform its rivals.

   - Sources: Cost advantage, differentiation advantage, focus strategy.

   - Definition: Creating a unique position within an industry that allows the firm to provide value to customers while controlling costs.

   - Trade-offs: Choices made in activities to achieve strategic positioning.

   - Strengths, Weaknesses, Opportunities, Threats: Framework for analyzing internal strengths and weaknesses along with external opportunities and threats.

   - Understanding Competitors: Identifying competitors, their strategies, strengths, and weaknesses.

   - Strategic Groups: Clustering competitors based on similar strategies and competitive positions.

   - Market Structure: Concentration, differentiation, barriers to entry.

   - Industry Dynamics: Industry growth, technological changes, regulatory factors.

    - Process: Setting objectives, analyzing the environment, formulating strategies, implementing and monitoring.

This fundamental economic concept refers to the value of the next best alternative forgone when a decision is made. Understanding opportunity cost is crucial for firms when evaluating different strategic options and resource allocations.

Competitive advantage is what sets a firm apart from its competitors and allows it to outperform them in the market. This can be achieved through cost leadership, differentiation, or focus strategies.

Market dynamics refer to the forces that influence the behavior of buyers and sellers in a market. Understanding market dynamics helps firms anticipate changes, adapt their strategies, and capitalize on opportunities.

Vertical integration involves a firm expanding its operations either upstream or downstream in the supply chain. This strategic decision impacts control over inputs, costs, and market power.

Barriers to entry are obstacles that make it difficult for new firms to enter a market. These barriers can include economies of scale, brand loyalty, regulatory restrictions, and high capital requirements.

Competitive response refers to how firms react to the actions of their competitors. Understanding competitive responses helps firms anticipate reactions and adjust their strategies accordingly.

Strategic positioning involves creating a unique and valuable position within a market to attract target customers. Effective strategic positioning helps firms differentiate themselves and build a sustainable competitive advantage.

Innovation is the process of introducing new ideas, products, or processes that create value for customers. Fostering a culture of innovation is essential for firms to stay competitive and adapt to changing market conditions.

Industry structure refers to the characteristics and dynamics of a particular market, including the number of competitors, barriers to entry, and degree of product differentiation. Analyzing industry structure helps firms identify strategic opportunities and threats.

Sustainable competitive advantage is a long-term advantage that a firm has over its competitors, which is difficult to replicate. Strategies for sustaining competitive advantage may include continuous innovation, strong customer relationships, and operational excellence.

B. Opportunity cost

B. Long-term advantage that is difficult to replicate

B. Property rights theory of the firm

A. Market dynamics

C. Barriers to entry

B. Vertical integration

A. Sustainable competitive advantage

B. Strategic positioning

A. Competitive advantage theory