Bank Chapter 9 Study Guide

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CHAPTER #1 -- KEY TERMS • Competitive Advantage (p.4) – An advantage that a bank, or any company, has over its competitors is that firm’s competitive advantage. This advantage may allow it generate more sales revenue, increase its profit margins, or deliver better customer service. Whatever the advantage, it is what makes it better (the advantage) than its competitors. • Stakeholders (p. 18) – Stakeholders are groups or individuals who affect or are affected by the company’s actions and/or performance. They are interested in the company’s survival and profitability. Stakeholders may be internal (e.g. teammates, managers, executives) or external (e.g. communities, regulators, governments, etc.) Chapter #2 – KEY TERMS • Strategic (long-range) Planning (p. 39) – An activity that is used by a company’s executive management to set priorities and organize resources to ensure that the company is working toward the common goal. It is a top-down process which could predict future success based on anticipated growth. • Scenario Planning (p. 40) – is a strategic planning method in which managers envision different scenarios to anticipate plausible future outcomes. Using the scenario planning, management takes the strategic plan, then asks “what if” and prepares for those results. Chapter #3 – KEY TERMS • Five Forces Model (p. 64) – Michael Porter identified five key competitive forces that determine an industry’s weaknesses and strengths and those managers need to consider

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