Melchor A.

Candelaria BSMA- 2A Strategic Management

 Risk Capital – it is capital that cannot be recovered if a company fails and goes bankrupt.
 Shareholder Value – It is the returns that shareholder earn from purchasing shares in a company. These
returns come from two sources: Capital appreciation in the value of a company’s shares, and Dividend
payments.
 Profitability – It is the ability of a business to earn a profit.
 Profit Growth - This can be measured by the increase in net profit over time. A company can grow its profit
if it sells products in markets that are growing rapidly, gains market share from rivals, increases the amount
it sells to existing customers, expands overseas, or diversities profitably into new lines of business.
 Competitive Advantage – It happens when a company’s profitability is greater than the average profitability
and profit growth of other companies competing for the same set of costumers.
 Sustain Competitive Advantage - A company has a SCA when its strategies enable it to maintain above-
average profitability for a number of years.
 Business Model – It is a manager’s conception of how the set of strategies his company pursues should mesh
together into a congruent whole, enabling the company to gain a competitive advantage and achieve superior
profitability and profit growth.
 General Manager – The one who is bear responsibility for the overall performance of the company or for one
of its major self-contained subunits or divisions.
 Functional Manager – The one who is responsible for supervising a particular function, that is, a task, an
activity, or an operation, such as accounting, marketing, research and development, information technology,
or logistics.
 R & D (Research and Development) - Refers to the activities companies undertake to innovate and introduce
new products and services. It is often the first stage in the development process.
 Multidivisional Company – A company that competes in several different businesses and has created a
separate, self-contained division to manage each.
 CEO (Chief Executed Officer) - The highest-ranking person in a company or other institution, ultimately
responsible for making managerial decisions.
 Business Unit- A self-contained division (with its own functions, for example, finance, purchasing, production,
and marketing departments) that provides a product or service for a particular market.
 Corporate Mission - A sentence describing a company's function, markets and competitive advantages; a
short written statement of your business goals and philosophies. A mission statement defines what an
organization is, why it exists, its reason for being.
 Major Corporate Goals - Are targets set by an organization as specific, quantifiable outcome that it commits
to attain in order to achieve its corporate mission and objectives.
 Internal Operating Environment – Refers to the culture, members, events and factors within an organization
that has the ability to influence the decisions of the organization, especially the behavior of its human
resource.
 Mission – A company’s mission describes what the company does.
 Product-Oriented Business Definition – It is focus on the characteristics of the products sold and the markets
served, not on which kinds of costumer needs the products are satisfying.
 Costumer-Oriented Business Definition – This can be safeguard the companies from being caught unaware
by major shifts in demand.
Melchor A. Candelaria BSMA- 2A Strategic Management

 Vision – The vision of a company lays out some desired future state; it articulates, often in bold terms, what
the company would like to achieve.
 Values – The values of a company state how managers and employees should conduct themselves, how they
should do business, and what kind of organization they should build to help a company achieve its mission.
 Goal – It is a precise and measurable desired future state that a company attempts to realize.
 Functional-Level Strategies – Are directed at improving the effectiveness of operations within a company,
such as manufacturing, marketing, materials management, product development, and customer service.
 Business-Level Strategies – It is encompassing the business’s overall competitive theme, the way it positions
itself in the marketplace to gain a competitive advantage, and the different positioning strategies that can be
used in different industry settings.
 Global Strategies – It address how to expand operations outside the home country to grow and prosper in a
world where competitive advantage is determined at a global level.
 Corporate-Level Strategies – It is when a business makes a decision that affects the whole company.
A corporate-level strategy affects a company's finances, management, human resources, and where the
products are sold.