Action Programs - Well defined activities that emanate from broader definitions of strategy (at business and functional levels).  They correspond to a pragmatic expression of strategy. Action Programs should respond to the desired changes in the mission, address properly the opportunities and threats revealed by the environmental scanning process, and reinforce strengths as well as neutralize the weakness uncovered in the internal scrutiny.  The Action Programs are defined at two different levels of specificity: Broad Action Programs typically covering a multiyear planning horizon, normally understood to represent long-term strategic objectives; and Specific Action Programs, covering period up to 18 months, which represents the necessary tactical support to realize strategic objectives.

 Benchmarking - The comparison of selected performance measurements against some challenging yardsticks. These can be generated by internal-historical comparisons; by comparing ourselves against the key competitors in our industry or by measuring ourselves against the “best-in-class” performers in every functional activity.

 Capabilities - Resources are converted into Capabilities when the firm develops the necessary organizational routines to use them effectively.

 Challenges - Significant obstacles and tasks that arise from the need for changes in scope in Product, Market, Geography, and Competencies, and will require significant management attention.

 Competencies - Capabilities that set your business apart from others in the industry. They are abilities that can give you a unique and sustainable advantage over your competitors if you use them effectively. 

Competitive Advantage - It is the distinct way a business or firm is positioned in the market in order to obtain an advantage over competitors, which means an ability to maintain sustained levels of profitability above the industry average.  At the heart of achieving a long-term sustainable competitive advantage is the identification of opportunities to create conditions of disequilibria which can legitimately allow a firm to claim economic rents beyond those resulting from perfect competition, and then to protect and sustain those conditions for as long as possible.

Competitive Analysis - An orderly process which attempts to capture the structural factors that define the long-term profitability prospects of an industry, and to identify and characterize the behavior of the most significant competitors. 

Competitive Strengths - Competitive advantages of a business relative to their competition.  Their identification can help to implement the proper strategy. 

Competitive Threats - Events or trends in the industry and/or market that confront any competitor with a possible need to change course to avoid becoming disadvantaged. They usually apply to all or most of the competitors in the industry and in that way are different than weaknesses.  

Competitive Weaknesses - Competitive disadvantages of a business relative to their competition.  Their identification can help to implement the proper strategy. 

Core Competencies - The consolidation of corporate-wide technologies and production skills that empower business units to adapt quickly to changing opportunities. A Core Competency provides access to a wide variety of markets; it makes a significant contribution to the perceived customer benefits of the end product; and it should be difficult for competitors to imitate. 

Core Products - Intermediate products that embody the Core Competencies of the firm and that are used in the final assembly or manufacturing of end-products. 

Corporate Strategic Thrusts - Strategic thrusts are the primary issues the firm has to address during the next three to five years to establish a healthy competitive position in the key markets in which it participates. The Corporate Strategic Thrusts translate the broad sense of directions the organization wants to follow into a practical set of instructions to all key managers involved in the Strategic Planning Process.

 Corporate Strategy  - At the corporate level, the decisions which, by their nature, should be addressed with full corporate scope. These are decisions that cannot be decentralized without running the risks of committing severe sub-optimization errors. The central issue behind the corporate strategy is how to add value at the corporate level.

 Critical Success Factors - Competitive capabilities in which you need to excel to achieve long-term success. They can be oriented to any portion of your internal value chain and are not necessarily directly visible to the customer. They are the best dimensions along which to compare yourself to your competition. Many of your Strengths and Weaknesses are determined from comparing yourself to your competition in the area of the Critical Success Factors.

Environmental Scan at the Business Level - The Environmental Scan at the Business Level attempts to identify the degree of attractiveness of the industry in which the business belongs, in terms of its potential for sustainable long-term profitability. 

Environmental Scan at the Corporate Level - The Environmental Scan at the Corporate Level attempts to diagnose the general health of the industrial sectors relevant to the businesses in which the corporation is engaged. It concentrates on assessing the overall economic, political, technological, and social climates that affect the corporation as a whole. This assessment has to be conducted, initially, from a historical perspective to determine how well the corporation has mobilized its resources to meet the challenges presented by the external environment. Then, with a futuristic view in mind, future trends in the environment must be predicted and a repositioning of the internal resources sought to adapt the organization to those environmental trends. The main components of this scan are the “economic overview”; the analysis in the “primary industrial sectors” or markets in which the firm competes; and the “basic external factors” analysis which encompasses the study of favorable and unfavorable impacts. 

Five-Forces Model - A model proposed by Michael Porter to determine industry attractiveness by performing an analysis of the industry structure. The five forces that typically shape the industry structure are: rivalry among competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers.  

Horizontal Strategy - Horizontal Strategy is a set of coherent long-term objectives and action programs aimed at identifying and exploiting interrelationships across distinct but related business units. The types of possible inter-relationships are: tangible interrelationships, arising from opportunities to share activities in the value chain; intangible interrelationships, involving the transference of management know-how among separate value chains; and competitor interrelationships, stemming from the existence of rivals  who actually or potentially compete with the firm in more than one business unit. 

Industry - A group of companies competing to sell similar products and/or services into a market. 

Key Performance Indicators - A stable set of indicators, considered to be the key to follow up the operation and performance of a business unit, which allow managers to detect and monitor the competitive position of all businesses the firm  is engaged in. These indicators tend to be permanent and uniformly applied to all business units of a firm. 

Leadership Imperative - The vision and sense of purpose provided by the CEO, which poses a significant but reachable challenge to the entire organization, motivating people and generating a spirit of success. 

Mission of the Business - It is a statement of the current and future expected business scope and a definition of the way to attain competitive advantage. Business scope is expressed as a broad description of products, markets, and geographical coverage of the business today, and within a reasonably short time frame, commonly three to five years. For some businesses, technology is added as another dimension of its scope. 

Mission of the Firm - A statement of the current and future expected business scope, and of the unique competencies that the firm has developed and will continue to promote into the future. The declaration made explicit in the mission statement contains an inherent definition of priorities for the strategic agenda of the firm and identifies the major opportunities for growth and the capabilities that have to be enhanced to achieve a superior competitive advantage. As such, it provides basic guiding principles and a set of expectations that are going to condition the rest of the strategic activities at all managerial levels of the firm. 

Opportunities - Events or trends in the industry and/or market that provides competitors with a possible course for obtaining advantage. They usually apply to all or most of the competitors in the industry and in that way are different than Competitive Strengths or Competencies. 

Organizational Culture - Organizational Culture is a complex set of basic underlying assumptions and deeply held  beliefs shared by all members of the group that operate at a preconscious level and drive in important ways the behavior of individuals in the organizational context. 

Paradigm Shift - Paradigm Shift is a fundamental change in our understanding of how something works. The concept was first discussed in the 1962 book "The Structure of Scientific Revolutions" by the philosopher Thomas Kuhn. The application of this idea to the area of information technology has most recently been discussed by Don Tapscott and Art Caston "Paradigm Shift - The New Promise of Information Technology", McGraw-Hill 1993.  

Portfolio - Portfolio is a collection of businesses, each of which makes a distinct contribution to the overall corporate performance and which should be managed accordingly.  

Portfolio Management - Portfolio Management is a major responsibility at the corporate level geared at the analysis of the basic characteristics of the Portfolio of businesses of a firm, in order to assign priorities for resource allocation. Putting the Portfolio Management philosophy into place takes three steps as the typical company:  

1. Redefines businesses for strategic planning purposes as strategic business units (SBUs), which may or may not differ from operating units. 

2. Classifies these SBUs on a portfolio grid according to the competitive position and attractiveness of the particular product or market.

3. Uses this framework to assign each a 'strategic mission' with respect to its growth and financial objectives and allocates resources accordingly.  

Portfolio Planning Matrix - A management planning technique developed by the Boston Consulting Group which involves management plotting each of the businesses on a simple chart. These are then rated as `stars', `dogs' or `cash cows' and invested in, divested out of or took profits from, accordingly.

Resource Allocation - A corporate task that requires discrimination among the wide array of requests for funding of the corporate, business, and functional programs defined in the strategic planning process. This is necessary because the financial, technological, and human resources available to the firm are not sufficient to support every proposed activity. 

Scenario Driving Forces - Scenario Driving Forces fall roughly into four categories: (1) Social dynamics - quantitative, demographic issues (How influential will youth be in 10 years?); softer issues of values, lifestyle, demand, or political energy. (2) Economic issues - macroeconomic trends and forces shaping the economy as a whole (How will international trade flow and exchange rates affect the price of chips?); microeconomic dynamics (What might my competitors do?); and forces at work, on or within the company itself (Will we be able to find the skilled employees we need?). (3) Political issues - electoral (Who'll be the next president or premier?); legislative (Will tax policies be changed?). (4) Technological issues - direct (How will high-bandwidth wireless affect land-line telephony?); enabling (Will X-ray lithography bring in the next chip revolution?). 

Scenario Megatrends - Scenario Megatrends are the observable results of several Scenario Driving Forces. For instance, outsourcing of non-core activities is a megatrend in the business environment. It results from a number of driving forces, such as increased complexity, shorter time to market, and improved communications. Identifying Scenario Megatrends is an interactive process. Some Scenario Megatrends are already observable today. Uncovering and analyzing their driving forces is the basis for identifying new Scenario Megatrends. For instance, by combining Scenario Driving Forces in new ways and alternating their direction may give rise to new Scenario Megatrends. 

Scenarios - Scenarios are stories which describe different, though equally plausible, futures. Together, they are a tool for ordering one's perceptions about alternative future environments in which one's decisions might be played out. In practice, Scenarios resemble a set of stories, written or spoken, built around carefully constructed plots. Stories are an old way of organizing knowledge; when used as planning tools, they defy denial by encouraging--in fact, requiring--the willing suspension of disbelief. Stories can express multiple perspectives on complex events; Scenarios give meaning to these events. Scenarios are the highest level of aggregation of Scenario Driving Forces. By combining several related Scenario Megatrends, we identify two (or at most three) dimensions for scenarios. For each dimension two possible outcomes  should be considered. Keeping the number of Scenarios small helps to give them a distinctive identity. In order to explore additional Scenarios it is better to choose a new pair of dimensions than to expand the existing ones. 

Segmentation - The process of conceptualizing the purpose of an organization and translating it in terms of a variety of specific tasks, whose execution is located in different units of the organization. 

Strategic Challenges - An expression of the critical changes to be addressed in the definition of the mission statement at the business and corporate levels. Strategic Challenges should be specific and explain exactly what will be done to bring about the desired change in business scope and unique competencies. Broad and Specific Action Programs should respond to these challenges. 

Strategic Intent - An active management process that creates a sense of urgency, focuses the organization on the essence of winning and motivates people through actions like: developing a competitor focus, providing employees with the skills they need, leaving room for individual and team contributions, establishing clear milestones and reviewing mechanisms to track progress and ensure that  internal recognition and reward reinforce desired behavior. 

Strategic Planning Process - The Strategic Planning Process is a disciplined and well-defined organizational effort aimed at the complete specification of a firm’s strategy and the assignment of responsibilities for its execution. A formal planning process should recognize the different roles to be played by the various managers within the business organization in the formulation and execution of the firm’s strategies. 

Strategy Formulation - One of the major tasks of the planning cycle, including all the steps required for the formulation of strategy at the corporate, business, and functional levels; and for their consolidation at the corporate level. 

Strengths - See Competitive Strengths. 

Threats - See Competitive Threats. 

Vertical Integration - Vertical Integration involves a set of decisions that, by the nature of their scope, reside at the corporate level of the organization. These decisions are threefold: (1) defining the boundaries a firm should establish over its generic activities on the value chain; (2) establishing the relationship of the firm with its constituencies outside its boundaries, primarily its suppliers, distributors, and customers; and (3) identifying the circumstances under which those boundaries and relationships should be changed to enhance and protect the firm’s competitive advantage. 

Weaknesses - See Competitive Weaknesses.

 Wind Tunneling - Wind Tunneling is a practical method to test scenarios. A set of scenarios assumptions (sign-posts, indicators) is “Wind Tunneled” through scenarios, to see which ones crash, and to see which ones survive. It helps to create a robust strategy that can survive different scenarios (possible worlds).