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Capabilities

Firm's ability to use its resources effectively and to achieve its objectives. For instance, bringing a product to market faster than competitors. Such capabilities are embedded in the routines of the firm and are not easily documented as procedures and thus are difficult for competitors to replicate.

Competitive Advantage

A firm is said to have a competitive advantage over its competitors, when maintains returns that surpass the average for its industry. This advantage derives from the characteristics of a product that make it superior to competitive products.

Continuous Improvement

A management process whereby delivery processes (customer valued) are being constantly evaluated and improved accordingly with regards to efficiency, their level of effectiveness and flexibility.

Core Competencies

A core competency is a specific factor that a business sees as being central to the way it or its employees work. It fulfils three key criteria: (1) It provides consumer benefits; (2) It is not easy for competitors to imitate; (3) It can be leveraged widely to many products and markets.

Cost Leadership Strategy

A firm pursuing a cost-leadership strategy attempts to gain a competitive advantage primarily by reducing its costs below its competitors. If cost-leadership strategies can be implemented by numerous firms in an industry, or if no firms face a cost disadvantage in imitating a cost-leadership strategy, then being a cost leader does not generate a sustained competitive advantage for a firm. To generate a sustained competitive advantage depends on that strategy being rare and costly to imitate.

 

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