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Chapter Glossary
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barrier to imitation  Factors that make it difficult for a firm to imitate the competitive position of a rival.
broad market strategy  Serving the entire market.
business-level strategy  Strategy concerned with deciding how a firm should compete in the industries in which it has elected to participate.
competitive advantage  Advantage obtained when a firm outperforms its rivals.
competitive tactics  Actions that managers take to try to outmaneuver rivals in the market.
corporate-level strategy  Strategy concerned with deciding which industries a firm should compete in and how the firm should enter or exit industries.
differentiation strategy  Increasing the value of a product offering in the eyes of consumers.
distinctive competency  A unique strength that rivals lack.
diversification  Entry into new business areas.
economies of scale  Cost advantages derived from a large volume of sales or production.
economies of scope  Cost reductions associated with sharing resources across businesses.
focus strategy  Serving a limited number of segments.
internal governance skills  The ability of senior managers to elicit high levels of performance from the constituent businesses of a diversified enterprise.
legacy constraints  Prior investments in a particular way of doing business that are difficult to change and limit a firm's ability to imitate a successful rival.
low-cost strategy  Focusing managerial energy and attention on doing everything possible to lower the costs of the organization.
primary activities  Activities having to do with the design, creation, and delivery of the product; its marketing; and its support and after sales service.
related diversification  Diversification into a business related to the existing business activities of an enterprise by distinct similarities in one or more activities in the value chain.
strategy  An action that managers take to attain the goals of an organization.
support activities  Activities that provide inputs that allow the primary activities to occur.
sustainable competitive advantage  A distinctive competency that rivals cannot easily match or imitate.
unrelated diversification  Diversification into a business not related to the existing business activities of an enterprise by distinct similarities in one or more activities in the value chain.
value innovation  Using innovation to offer more value at a lower cost than competitors.
vertical integration  Moving upstream into businesses that supply inputs to a firm's core business or downstream into businesses that use the outputs of the firm's core business.

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