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Strategy
Dr. Ireland's Strategy Class
181
Business
Graduate
04/24/2011

Additional Business Flashcards

 


 

Cards

Term
2 types of internal innovation and their strategic implications
Definition
1. Incremental innovation - induced strategic behavior: the strategy in place is filtered through the firm's existing hierarchy [does not alter firm's current strategy] 2. Radical innovation - autonomous strategic behavior: knowledge is integrated into the development of new products that are taken into new markets in new ways of creating value [tends to diverge from firm's current strategy]
Term
3 factors that attribute to value creation from internal innovation
Definition
1. Entrepreneurial mind-set [necessary for managers and employees to consistently try to identify entrepreneurial opportunities that the firm can pursue by developing new goods and services and new markets] 2. Cross functional product and development teams [promotes new ideas and commitment to implementation afterwards] 3. Effective leadership and shared values [required to promote integration and vision for innovation and commitment to it]
Term
Agency costs
Definition
Sum of incentive, monitoring, and enforcement costs, and individual financial losses incurred by the principals, because governance mechanisms can’t guarantee total compliance by the agent.
Term
Agency relationship
Definition
One that exists when one or more people hire another person as decision-making specialist to perform a service.
Term
Associations and Consortia
Definition
can strengthen member firms in dealing with external stakeholders such as legislators suppliers and customers
Term
Autonomous Strategic Behavior
Definition
bottom-up process in which product champions pursue new ideas, often through a political process, to develop and coordinate the commercialization of a new good or service
Term
Board of directors
Definition
Individuals responsible for representing the firm’s owners by monitoring top-level managers’ strategic decisions.
Term
Board of directors
Definition
Group of shareholder-elected individuals whose primary responsibility is to act in the owners’ interests by monitoring and controlling top-level executives.
Term
Board of directors' classification
Definition
(1) Insiders (2) Related outsiders (3) Outsiders
Term
Characteristics of Entrepreneurial Firms
Definition
1. Risk takers 2. Committed to innovation 3. Proactive
Term
Characteristics of Entrepreneurs
Definition
1. Optimism 2. High motivation 3. Willingness to take responsibility 4. Courage 5. Passion for Value 6. Entrepreneurial mind-set
Term
Competition-reducing cooperative strategies
Definition
an alliance that addresses the external environment by giving the partnering firms differential advanatages in their markets
Term
Competitive Response Alliances
Definition
an alliance that addresses the external environment by helping firms deal with the actions of competitors
Term
Competitive form
Definition
a structure in which the firms divisions are completely independent.
Term
Complexities of Managing Multinational Firms
Definition
Geographic dispersion, Costs of Coordination, logistical costs, trade barriers cultural diversity, host government
Term
Cooperative form
Definition
a structure in which horizontal integration is used to bring about interdivisional cooperation.
Term
Cooperative form
Definition
a structure in which horizontal integration is used to bring about interdivisional cooperation.
Term
Cooperative strategy used to effectively address forces in the external environment
Definition
competitive response alliances, uncertainty-reducing alliances, competition- reducing alliances, associations and consortia
Term
Cooperative strategy used to enhance differentiation or reduce costs
Definition
complementary strategic alliances or network cooperative strategies
Term
Cooperative strategy used to promote growth and/or diversification
Definition
franchising, diversification strategic alliances, international cooperative strategies
Term
Corporate Entrepreneurship
Definition
use or application of entrepreneurship within an established firm
Term
Corporate governance
Definition
Mechanisms used to manage relationships among stakeholders, and to determine and control the strategic direction and performance of organizations. Primary objective: Align top-level managers' interests with those of shareholders.
Term
Corporate level core competencies
Definition
Complex sets of resources and capabilities that link different businesses, primarily through managerial and technological knowledge, experience, and expertise.
Term
Corporate-Level Strategy
Definition
specifies actions a firm takes to gain a competitive advantage by selecting and managing a portfolio of businesses that compete in different product markets or industries.
Term
Cross-functional product development teams
Definition
facilitates organizational efforts to integrate different activities and coordinate and apply knowledge from different functional areas to maximize innovation
Term
Diffuse ownership
Definition
Large number of shareholders with small holdings and few, if any, large-block shareholders. Produces weak monitoring of managers’ decisions.
Term
Distributed alliance networks
Definition
often the the organizational structure used to manage international cooperative strategies
Term
Does downsizing or downscoping have a more positive effect on firm performance?
Definition
downscoping
Term
Dominant business diversification strategy
Definition
the firm generates between 70 and 95 percent of its total revenue within a single business area.
Term
Downscoping
Definition
refers to a divestiture, spin-off, or some toher means of eliminating businesses that are unrelated to a firm's core businesses; described as a set of actions that causes a firm to strategically refocus on its core businesses
Term
Downsizing
Definition
a reduction in the number of firm employees & sometimes in the nubmer of operating units
Term
Dynamic Alliance Networks
Definition
a type of network cooperative strategy formed in industries characterized by frequent product innovations and short product life cycles
Term
Economic Risks of international expansion
Definition
1) Differences and fluctuations in currency values 2) Investment losses due to political risk
Term
Economies of Scope
Definition
Cost savings that the firm creates by successfully transferring some of its capabilities and core competencies to create value.
Term
Entrepreneurial Mind-Set
Definition
viewpoint which values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead to important innovations
Term
Entrepreneurial Opportunities
Definition
conditions in which new products or services can satisfy a need in the market, due to competitive imperfections and unevenly distributed information in the market
Term
Entrepreneurial Ventures
Definition
1. Produce more radical innovations 2. Possess strategic flexibility and willingness to take risks 3. Do more opportunity seeking
Term
Entrepreneurs
Definition
individuals throughout the organization, acting independently or as part of an organization, who create a new venture or develop an innovation and take risks by introducing it into the marketplace
Term
Entrepreneurship
Definition
process by which individuals or groups identify and pursue entrepreneurial opportunities without the immediate constraint of the resources they currently control: desirable and important mechanizm for creating opportunities, helping firms adapt to change, and driving national economies
Term
Executive Compensation
Definition
Governance mechanism that seeks to align the interests of top managers and owners through salaries, bonuses, and long-term incentive compensation.
Term
Executive compensation
Definition
Use of salary, bonuses, and long-term incentives to align managers’ decisions with shareholders’ interests.
Term
External governance mechanism
Definition
Market for corporate control
Term
Facilitating integration and implementation of cross-functional teams
Definition
shared values, effective leadership, and high-quality communication systems are important to successfully innovate and to facilitate cross-functional integration
Term
Factors that Encourage Innovation
Definition
vision and culture that support innovation, growth, and risk; top management support and organizational champions; teamwork and collaboration, decentralized approval process, valuing employee ideas, excellent communications; rewards for entrepreneurship; focus on learning
Term
Factors the Discourage Innovation
Definition
rigid bureaucracy and conservative decision making; absence of mgmt. support or champions; difficult approval process; closed-door offices; harsh penalties for failure; inadequate resources
Term
Financial Controls
Definition
emphasized to evaluate the performance of the firm following the unrelated diversification strategy, usually quantitative.
Term
Financial economies
Definition
are cost savings realized through improved allocations of financial resources based on investments inside or outside the firm.
Term
Flexible Coordination
Definition
Building a shared vision and individual commitment through an integrated network
Term
Global Strategy
Definition
international strategy through which the firm offers standardized products across country markets, with the competitive strategy being dictated by the home office
Term
Global Strategy Features
Definition
1) Emphasized economies of scale 2) facilitated by improved global accounting and financial reporting standards 3) centralizes strategic and operating decisions 4) Interdependent SBUs operating in each country 5) Home office integrates across SBUs, adding management complexity 6) Produces lower risk 7) Less responsive to local market opportunities 8) less effective learning processes due to pressure to conform and standardize
Term
How can the probability that downsizing will result in increased performance be increased?
Definition
it should be an intentional, proactive management strategy, rather than being forced on the firm as a result of involuntary decline.
Term
How is private synergy created?
Definition
when the combination and integration of the acquiring and acquired firm's assets yield capabilities and core competencies that could not be developed by combining and integrating either firm's assets with another company.
Term
Imitation
Definition
adoption of an innovation by similar firms
Term
Incentives for Using an International Strategy
Definition
1) Increased market sized, 2) greater returns on major capital investments or on investments in new products and processes, 3) greater economies of scale, scope, or learning, 4) competitive advantage through location
Term
Incremental Innovation
Definition
process of internal innovation achieved by building on existing knowledge bases and providing small improvement in well-defined current product lines
Term
Induced Strategic Behavior
Definition
top-down process whereby the firm's current strategy and structure foster product innovations that are closely associated with the strategy and structure
Term
Innovation
Definition
process of creating a commercial product from an invention
Term
Innovation through Acquisitions
Definition
Acquisitions can be used to support innovation efforts and rapidly extend product lines. The risks associated with innovation through acquisition should be measured when selecting this strategic option - firms may lose intensity in R&D efforts and ability to produce patents [substitute the ability to buy innovations for an ability to produce innovations internally]
Term
Innovation through Cooperative Strategies
Definition
Both entrepreneurial ventures and established firms use alliances to share the resources and knowledge required to produce continuous innovation for the firm. They each measure the risks associated with innovation through cooperative strategies
Term
Insiders
Definition
Active top-level managers in the corporation, source of information about firm’s day-to-day operations.
Term
Institutional Owners
Definition
Financial institutions (stock mutual and pension funds) that control large-block shareholder positions. Powerful governance mechanism.
Term
Internal Corporate Venturing
Definition
set of activities firms use to develop internal inventions and innovations
Term
Internal governance mechanisms
Definition
(1) Ownership concentration (2) Board of directors (3) Executive Compensation
Term
International Corporate-Level Strategy
Definition
focuses on the scope of a firm's operations through both product and geographic diversification
Term
International Diversification
Definition
strategy through which a firm expands the sales of its goods or services across the borders of global regions and counties into different geographic locations or markets
Term
International Entrepreneurship
Definition
process in which firms creatively discover and exploit opportunities that are outside their domestic markets in order to develop a competitive advantage
Term
International Entrepreneurship Risks
Definition
1. Unstable foreign currencies 2. Inefficient markets 3. Insufficient infrastructures to support businesses 4. Limitations on market size and growth
Term
International Entry Modes
Definition
1) Exporting - high cost, low control 2) Licensing - Low cost, low risk, little control, low returns 3) Strategic Alliance - shared cost, shared resources, shared risk, problems of integration 4) Acquisition - Quckic access to new market, high cost, complex negotiations, problems of merging with domestic operations 5) New wholly owned subsidiary - complex, ofeten costly, time consuming, high risk, maximum control, potential above-average returns
Term
International Strategy
Definition
strategy through which the firm sells its goods or services outside the domestic market
Term
Invention
Definition
act of creating or developing a new product or process
Term
Invention v. Innovation
Definition
Invention brings something new into BEING [technical criteria determine its success] v. Innovation brings something new into USE [commercial criteria determine its success]
Term
Large-block shareholders
Definition
Typically own at least 5% of a corporation’s issued shares.
Term
Long-term incentive plans
Definition
Help firms cope with or avoid potential agency problems by linking managerial wealth to that of common shareholders.
Term
Managerial Defense Tactics
Definition
Tactics to fend off hostile takeovers. Include: (1) Poison Pill (2) Corporate Charter (3) Golden Parachute (4) Litigation (5) Greenmail (6) Standstill (7) Capital Structure
Term
Managerial opportunism
Definition
The seeking of self-interest with guile (cunning or deceit).
Term
Managers' Benefits of Diversification
Definition
(1) Increase firm size. (Positively related to executive compensation; increases management complexity and may require more pay). (2) Reduce employment risk (risk of managers losing their jobs, compensation or reputations)
Term
Market for Corporate Control
Definition
External governance mechanism that becomes active when a firm’s internal controls fail. Composed of individuals and firms that buy ownership positions in or take over potentially undervalued corporations so they can form new divisions in established diversified companies or merge 2 previously separate firms. It ensures that managers who are ineffective or act opportunistically are disciplined.
Term
Market power
Definition
exists when a firm is able to sell its products above the existing competitive level or to reduce the costs of its primary and support activities below the competitive level.
Term
Matrix Organization
Definition
Organizational structure in which a dual structure combines both functional specialization and business product or project specialization.
Term
Methods of Innovation
Definition
1. Internal innovation 2. Cooperative ventures 3. Acquisitions
Term
Methods of Internal Innovation
Definition
Methods to develop inventions and innovations WITHIN the organization 1. Internal Corporate Venturing 2. Incremental Innovation 3. Induced Strategic Behavior 4. Radical Innovation 5. Autonomous Strategic Behavior 6. Product Champion
Term
Modern public corporation
Definition
Based on the efficient separation of ownership and managerial control.
Term
Multidomestic Strategy
Definition
International strategy in which strategic and operating decisions are decentralized to the strategic business-unit (SBU) in each country to allow the units to tailor products to local markets
Term
Multidomestic Strategy Features
Definition
1) Variations of competition within each country 2) Customize products to meet needs of local customers 3) Decentralize firms strategic and operating decisions 4) Takes steps to isolate firm from global competitive forces 5) Uncertainty due to differences across markets
Term
Multimarket competition
Definition
When two or more diversified firms simultaneously compete in the same product or geographic markets.
Term
Network Cooperative Strategy - Competencies
Definition
to increase network effectiveness the strategic center firm seeks ways to support each member's efforts to develop core competencies that can benefit the network
Term
Network Cooperative Strategy - Race To Learn
Definition
the strategic center firm emphasizes that the principal dimensions of competition are between value chains and between networks of value chains.
Term
Network Cooperative Strategy - Strategic Outsourcing
Definition
the strategic center firm outsources and partners with more firms than do other network members. At the sme time the strategic center firm requires network opportunities for the network to create value through its cooperative work
Term
Network Cooperative Strategy - Technology
Definition
The strategic center firm is responsible for managing the development and sharing of technology based ideas among network members. All network members report technology development activities to strategic center firm
Term
Offshoring
Definition
Offshore outsourcing
Term
Opportunism
Definition
Attitude (inclination) and a set of behaviors (specific acts of self-interest)
Term
Organizational Controls
Definition
Guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference between actual and expected results is unacceptable.
Term
Outsiders
Definition
Provide independent counsel, may hold top-level managerial positions in other companies or elected before the beginning of the current CEO’s tenure.
Term
Ownership Concentration
Definition
Defined by number of large-block shareholders and the total percentage of shares they own. High degrees of ownership concentration = higher probability that managers’ strategic decisions will increase shareholder value.
Term
Ownership concentration
Definition
Relative amounts of stock owned by individual shareholders and institutional investors.
Term
Political risks of International expansion
Definition
1) Government instability 2)conflict or war 3) government regulation 4) conflicting and diverse legal authorities 5) Potential nationalization of private assets 6) government corruption 7) changes in government policies
Term
Porter's Diamond Model
Definition
International business-level stategies are usually grounded in one or more home country advantages. The diamond model emphasizes four dimensions: factors of production; demand conditions; related and supporting industries' and patterns of firm strategy, structure, and rivalry.
Term
Product Champion
Definition
individual with an entrepreneurial vision of a new good or service who seeks to create support in the organization for its commercialization
Term
Radical Innovation
Definition
process of internal innovation achieved by generating significant technological breakthroughs and creating new knowledge
Term
Reasons to establish a strategic alliance in a fast cycle market
Definition
(1) speed up development of new goods or services (2) speed up new market entry (3) maintain market leadership (4) from an industry technology standard (5) share risky R&D expenses (6)overcome uncertainty
Term
Reasons to establish a strategic alliance in a slow cycle market
Definition
(1) gain access to restricted market (2) establish a franchise in a new market (3) maintain market stability
Term
Reasons to establish a strategic alliance in a standard cycle market
Definition
(1)gain market power (reduce industry overcapacity) (2)gain access to complementary resources (3)establish better economies of scale (4)overcome trade barriers (5) meet competitive challenges from other competitors (6) pool resources for very large capital projects learn new business techniques
Term
Related Outsiders
Definition
Have some relationship with the firm, but not involved with the corporation’s day-to-day activities.
Term
Related diversification strategy
Definition
when a firm generates more than 30 percent of its sales revenue outside a dominant business and has businesses that are related to each other in some manner
Term
Related linked diversification strategy
Definition
a diversified company with a portfolio of businesses with only a few links between them is called a mixed related and unrelated firm
Term
Results of Imitation
Definition
1. Product or process standardization 2. Products made with fewer features 3. Products offered at lower prices
Term
Single business strategy
Definition
is a corporate-level strategy in which the firm generates 95 percent or more of its sales revenue from its core business area.
Term
Stable Alliance Network
Definition
a type of network cooperative strategy formed in mature industries in which demand is relatively constant and predictable
Term
Strategic Controls
Definition
Subjective criteria intended to verify the firm is using appropriate strategies for the conditions in the external environment and the companies competitive advantages.
Term
Strategic Entrepreneurship
Definition
occurs as firms seek opportunities in the external environment that they can exploit through innovations
Term
Strategic business-unit form - M-form was thought to have 3 major benefits:
Definition
1. It enabled corporate officers to more accurately monitor the performance of each business, which simplified the problem of control
2. It facilitated comparisons between divisions, which improved the resource allocation process
3. It stimulated managers of poorly performing divisions to look for ways of improving performance
Term
Synergy
Definition
exists when the value created by business units working together exceeds the value those same units create working independently.
Term
Taper Integration
Definition
arises when a firm sources inputs externally form independent suppliers as well as internally within the boundaries of the firm, or disposes of its outputs through independent outlets in addition to company owned distribution channels.
Term
The failure of an acquisition strategy sometimes ______________ a restructuring strategy.
Definition
precedes
Term
Transnational Strategy
Definition
international strategy through which the firm seeks to achieve both global efficiency and local responsiveness
Term
Trends among boards of directors
Definition
(1) Increased diversity of backgrounds. (2) Use of formal processes to evaluate the board’s performance. (3) “lead director” role with strong power to setting of board’s agenda and oversight of nonmanagement board members. (4) Modifications of director's compensation. (5) Require directors to own significant stakes in the company.
Term
Unrelated diversification strategy
Definition
A highly diversified firm, which has no well-defined relationships between its businesses.
Term
Value-Neutral Diversification
Definition
Antitrust regulation
Tax laws
Low performance
Uncertain future cash flows
Risk reduction for firm
Tangible resources
Intangible resources
Term
Value-Reducing Diversification
Definition
Diversifying managerial employment risk
Increasing managerial compensation
Term
Vertical Integration
Definition
When a company produces its own inputs or owns its own source of distribution of outputs.
Term
What are the 3 restructuring strategies companies use?
Definition
1. Downsizing
2. Downscoping
3. Leveraged Buyouts
Term
What are the 3 types of LBOs?
Definition
1. Management Buyouts
2. Employee Buyouts
3. Whole-firm Buyouts
Term
What are the 6 reasons why acquisitions fail?
Definition
1. Integration Difficulties and an Inability to Achieve Strategy
2. Inadequate Evaluation of Target
3. Large or Extraordinary Debt
4. Too Much Diversification
5. Managers Too Focused on Acquisitions
6. Firm Becomes Too Large
Term
What are the 6 reasons why companies make acquisitions?
Definition
1. Increase market power
2. Overcome Entry Barriers
3. Reduce Costs and Risks Associated with New Product Development
4. Increase Speed to Market
5. Increase Diversification and Reshape the Firm's Competitive Scope
6. Learn and Develop New Capabilities
Term
What are the 7 attributes of successful acquisitions?
Definition
1. Target firm's assets complement the acquired firm's assets
2. Acquisition is friendly
3. Effective due-diligence processes
4. Acquiring firm has financial slack (cash or favorable debt position)
5. Post-acquisition debt costs moderate or low
6. Post-acquisition emphasis on R&D and innovation
7. Management of both firms have experience with change and is flexible and adaptable
Term
What are the short-term and long-term outcomes of a leveraged buyout (LBO)?
Definition
In the short-term, there are high debt costs and an emphasis on strategic controls. However, in the long-term, while emphasis on strategic controls leads to higher performance, higher debt costs leads to higher risk.
Term
What are the short-term and long-term outcomes of downscoping?
Definition
In the short-term, debt costs are reduced and there is an emphasis on strategic controls. In the long-term, reduced debt costs and emphasis on strategic controls lead to higher performance.
Term
What are the short-term and long-term outcomes of downsizing?
Definition
In the short-term, labor costs are reduced. However, these reduced labor costs will lead to loss of human capital and lower performance in the long-term.
Term
What challenges do firms face when trying to create an entrepreneurial culture?
Definition
1. Identifying the right people [intellectual talent & entrepreneurial mind set] 2. Managing the people [intellectual talent and realizing its potential] 3. Develop and expand knowledge base to encourage entrepreneurship [info systems, training programs, cross-functional teams]
Term
What is commonly the primary goal of restructuring? And, which strategy is most closely aligned with this goal?
Definition
The primary goal of restructuring is gaining or reestablishing effective strategic control of the firm. Downscoping is most closely aligned with establishing and using strategic controls.
Term
Why are nations interested in entrepreneurship?
Definition
1. Promotes economic growth 2. Increases productivity 3. Creates jobs 4. Drives the economies of the nations in which it exists
Term
Worldwide Combination Structure
Definition
organizational structure in which characteristics and mechanisms are drawn from both the worldwide geographic area structure and the worldwide product divisional structure (used to implement transnational strategy)
Term
Worldwide Geographic Area Structure
Definition
organizational structure that emphasizes national interests and facilitates efforts to satisfy local or cultural differences (used to implement the multidomestic strategy)
Term
Worldwide Product Divisional Structure
Definition
organizational structure in which decision-making authority is centralized in the worldwide division headquarters to coordinate and integrate decisions and actions among divisional business units (used to implement the global strategy
Term
acquisition
Definition
One firms buys a controlling, 100% interest in another firm with the intent of making it a subsidiary business within its portfolio.
Term
bureaucratic controls
Definition
formalized supervisory and behaviorial rules and policies designed to ensure that decisions and actions across different units of a firm are consistent.
Term
co-opetition
Definition
when a cooperative strategy is formed between firms that compete with each other
Term
competitive risks in cooperative strategies
Definition
inadequate contracts, misrepresentation of competencies, partners fail to use their complemetary resources, holding alliance partner's specific investments hostage
Term
complementary strategic alliances
Definition
business level alliances in which firms share some of their resources and capabilities in complementary ways to develop competitive advantages
Term
cooperative strategy
Definition
a strategy in which firms work together to achieve a shared objective
Term
cross-border acquisitions
Definition
made between companies with headquarters in different countries.
Term
cross-border strategic alliance
Definition
an international cooperative strategy in which firms with headquaters in a different nations combine some of their resources and capabilities to create a competitive adavantage
Term
diversifying strategic alliance
Definition
a corporate level cooperative strategy in which firms share some of their resources and capablities to diversify into new product or market areas
Term
downscoping
Definition
divestiture, spin-off, or some other means of eliminating businesses that are unrelated to a firm's core businesses. The goal is to reduce the firm's level of diversification.
Term
downsizing
Definition
a reduction in the number of a firm's employees and, sometimes, in the number of its operating units, but it may or may not change the composition of businesses in the company's portfolio.
Term
due diligence
Definition
process through which a potential acquirer evaluates a target firm for acquisition.
Term
equity strategic alliance
Definition
an alliance in which two or more firms own portion of the equity in the venture they have created (e.g. US and Japanese firms direct investment in China)
Term
explicit collusion
Definition
exists when firms directly negotiate production output and pricing agreements in order to reduce competition
Term
franchise
Definition
a contractual agreement between two legally independent companies whereby the franchisor grants the right to the franchisee to sell the franchisor's product or do business under the trademarks in a given location for a specified period of time
Term
franchising
Definition
a cooperative strategy in which a firm (the franchisor) uses a franchise as a contractual relationship to describe and control the sharing of its resources and capabilities with partners (the franchisees)
Term
horizontal acquisition
Definition
acquisition of a company competing in the same industry in which the acquiring firm competes.
Term
horizontal complementary strategic alliance
Definition
an alliance in which firms share some of their resources and capabilities from the same stage of the value chain to create a competitive advantage
Term
hostile takeover
Definition
not only unexpected, but undesired by the target firm's managers.
Term
joint venture
Definition
a strategic alliance in which two or more firms create a legally independent company to share resources and capabilities to develop a competitive advantage.
Term
leveraged buyout (LBO)
Definition
a restructuring strategy whereby a party buys all of a firm's assets in order to take the firm private. Often, the intent of the buyout is to improve efficiency and performance to the point at which the firm can be sold successfully within five to eight years.
Term
merger
Definition
Two firms agree to integrate their operations on a relatively co-equal basis.
Term
mutual forbearance
Definition
is a form of tacit collusion in which firms avoid competitive attacks against those rivals they meet in multiple markets
Term
network cooperative strategy
Definition
a cooperative strategy in which multiple firms agree to from partnerships to achieve shared objectives (japanese network cooperative strategy is called keiretsu)
Term
nonequity strategic alliance
Definition
an alliance in which two or more firms develop a contractual relationship to share some of their unique resources and capabilities to create a competitive advantage
Term
private equity firms
Definition
firms that facilitate or engage in taking public firms private
Term
related acquisitions
Definition
acquisition of a firm in a highly related industry.
Term
restructuring
Definition
a strategy through which a firm changes its set of businesses or financial structure. Used to improve a firm's performance by correcting for problems created by ineffective management.
Term
risk and asset managemet approaches in cooperative strategies
Definition
(1) cost-minization focus (2) detailed contracts and monitoring (3) opportunity-maximization (4)developing trusting relationships
Term
strategic alliance
Definition
a cooperative strategy in which firms combine resources and capabilities to create a competitive advantage
Term
synergy
Definition
value created by business units working together that would not have been created in those same units working independently.
Term
tacit collusion
Definition
exists when several firms in an industry indirectly coordinate their production and pricing decisions by observing each other's competitive actions and responses
Term
takeover
Definition
Acquisition strategy where the target firm did not solicit the acquiring firm's bid.
Term
uncertainty-reducing alliances
Definition
an alliance that addresses the external environment by helping firms take some of the uncertainty out of the environments they are facing
Term
vertical acquisition
Definition
refers to a firm acquiring a supplier or distributor of one or more of its goods or services.
Term
vertical complementary strategic alliance
Definition
an alliance in which firms share their resources and capabilities from different stages of the value chain to create a competitive advantage
Term
M-Form (multidivisional structure)
Definition
consisting of several operating divisions, each representing a separate business or profit center in which the top corporate officer delegates responsibilities for the day-to-day operations and business-unit strategy to division managers
Term
five components to the wheel strategy
Definition
oMarkets and products
oOperations and innovation
oIdentity and reputation
oOrganization and people
oStrategy and competition
Term
Ireland’s takeaways from: FINDING YOUR STRATEGY IN THE NEW LANDSCAPE by Ghemawat
Definition
oWho and what? Of the target customer groups… the what may not be changing but the who is changing dramatically
oPredicting trends and their implications
oUse the 5 force model to reposition corporation
oChange the way we are managing the value change depending on where the value will be in the future
Term
· Two main takeaways from: FINDING YOUR STRATEGY IN THE NEW LANDSCAPE by Ghemawat
Definition
oFor a typical multinational the post crisis world requires a somewhat looser approach to strategy and organization than was popular just a few years ago.
oMultinationals must increase diversity in their ranks but, at the same time, build cohesive corporate cultures and tighten their talent management practices
Term
According to Ghemawat's strategy wheel companies need to adjust their approach to strategy and competition by doing these 3 things:
Definition
1.) adapt to local differences
2.) invest more selectively
3.) watch for emerging-market competition
Term
According to Ghemawat's strategy wheel companies need to adjust their strategy in relation to Markets and Products by doing these3 things:
Definition
1.) Focus on underserved segments everywhere
2.) Recognize price pressures
3.) Cultivate requisite variety
Term
According to Ghemawat's strategy wheel companies need to adjust their approach to operations and innovation by doing these 4 things:
Definition
1.) rethink the scope of offshoring
2.) simplify supply chains
3.) import process innovations from emerging economies
4.) move R&D to where researchers and market growth are
Term
According to Ghemawat's strategy wheel companies need to adjust their approach to the organization and people by doing these 4 things:
Definition
1.) Re-create country manager functions
2.) relocate key functions
3.) develop a globally representative talent pool
4.) exploit communication technologies
Term
According to Ghemawat's strategy wheel companies need to adjust their approach to identity and reputation by doing these 3 things:
Definition
1)build a strong corporate identity
2)emphasize corporate citizenship
3)restore the reputation of business in general
Term
Chandler Growth Sequence
Definition
1.)Product in single market
2.)establish units in other locations
3.)verticle integration
4.)diversification
Term
model of professional directorship in corporate boards
Definition
1.)the corporate board should be reduced to 7 members
2.)most board directors should have industry expertise
3.)require directors to devote sufficient time to their corporate board duties
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