Shared Flashcard Set

Details

MGMT 478 EXAM 2
MGMT 478 EXAM 2
16
Management
Undergraduate 4
06/05/2013

Additional Management Flashcards

 


 

Cards

Term

Define Corporate-level strategy

6

Definition

Strategies firms use to diversify their operations from single markets to several product markets and industries.

 

Tells firm:

1) what markets to comopete in?

2) how to manage them

Term

Levels of Diversification: Figures 6.1 and 6.2

6

Definition

Low Levels:

  • Single Business A
  • Dominant Business A--B

Moderate/High Levels:

  • Related constrained A--B--C--B--A
  • Related linked A--B--C

Very High Levels: 

  • Unrelated A B C
Term

Reasons for Diversification

6

Definition

--Increase a firm's value by improving overall performance

  • Value-Creating
  • Value-Neutral
  • Value-Reducing
Term

How does diversification add value?

6

Definition

Economies of Scope

Operational relatedness: Sharing activites/tangible

Corporate relatedness: Sharing core competencies/processes

Term

Explain Related and Unrelated Diversification

6

Definition

Related: businesses share links

  • Constrained: Links among all businesses, (A-B-C)
  • Linked: linked but not for all, A-->B-->C

Unrelated: businesses are unrelated

Term

Define Merger

Define Acquisition

7

Definition

Merger: a strategy where two firms agree to integrate their operations on a relatively EQUAL basis

Acqisition: a strategy where one firms buys controlling interest in another firm with intent of making the firm a subsidiary business within its portfolio

Term

What are some reasons for acquisitions?

7

Definition

Increased Market Power

Increased Diversification

Increased Speed to Market

Decreased Entry Barriers

Decreased cost of New Product Development

Decreased Risk than ground-up Development

Reshape Competitive Scope

Learning New Capabilities

 

 

Term

What are some problems with achieving success with acquisitions?

7

Definition
  • Integration difficulty
  • Large debt
  • Inadequate targets
  • No synergy
  • Too much diversification
  • Managers
  • Too large

 

Term

Explain Restructuring:

7

Definition
  • Strategy where a firm changes its set of businesses or financial structure.
Term

Define International Strategy:

8

Definition
  • Strategy where firm sells its goods/sesrvices outside its domestic market
Term

What is Porter's Diamond?

8

Definition

The four determinants of competitive advantage of nations

1) Factors of production

2) Demand conditions

3) Related and supporting industries

4) Firm strategy/structure/rivalry

Term

How does Porter's Diamond relate to determinants of national competitive advantage?

8

Definition

Porter's Diamond affects four things that lead to a national competitive advantage:

  1. Availability of resources/skills
  2. Information that firms use to decide which opportunities to pursue with those resources/skills
  3. Goals of individuals in companies
  4. Pressure on companies to innovate/invest
Term

What are the different types of international Corporate-level strategies?

8

Definition
  1. Multidomestic: decisions are decentralized to the specific location to tailor products to local market.
  2. Global: firm's HOME office determines strategies to use in each country.
  3. Transnational: firm seeks to achieve BOTH global efficiency and local responsiveness.
Term

Explain the choice of entry mode:

8

Definition
  1. Exporting
  2. Licensing
  3. Strategic Alliances
  4. Acquisitions
  5. New wholly owned subsidiary
Term

Explain Cooperative Strategy:

9

Definition

Firms collaborate for the purpose of working together to achieve a shared objective; creates value for the customer

Term

What are the different types of major strategic alliances?

9

Definition
  1. Joint Venture: create legally independent company
  2. Equity Strategic Alliance: own percentages of new company
  3. NonEquity Strategic Alliance: contract to share resources
--ALL to share resources for the purpose of developing a competitive advantage
Supporting users have an ad free experience!