Shared Flashcard Set

Details

BA 453
Final Study Cards
47
Business
Undergraduate 4
03/20/2014

Additional Business Flashcards

 


 

Cards

Term
Vertical Integration Benefits
Definition
Secure critical supplies
Lower cost
Improve quality
Facilitate schedule/planning (improve efficiency)
Term
Vertical Integration Risks
Definition
Increase costs
Reduce quality
Reduce flexibility
Legal repercussions
Term
Horizontal integration pros
Definition
lower costs
Increase value
increase bargaining power
Increase differentiation
manage industry rivalry
Term
Horizontal Integration Cons
Definition
Fail to create value
Implentation is not easy
Fail to produce gains
Conflict with anti-trust agency
Term
Corporate Scope
Definition
Vertical- along value chain
Horizontal - product/supplies
Geographic - market
Term
BCG Matrix? Name the 4 and earnings/strategy
Definition
Cash Cow: high earnings/hold
Star: high earnings/ hold or invest
Dog: low earnings/ divest
? : low or growing / increase diversity
Term
Advantages of staying in a single industry
Definition
Focus resources and capabilities on competing successfully in one area

Focus on what the company knows and does best
Term
Advantages of moving out from a single industry
Definition
REduce dependence on fortune of one industry

exploit the opportunity to leverage resources and capabilities to other activities
create knew opportunities to learn

hold competitor in check
Term
What are the Options for strategic growth
Definition
Integration (horizontal/vertical)

Strategic Outsourcing

Diversification
Term
Corporate Strategy (what are the 3 main)
Definition
Economies of scale

Economies of scope

Transaction costs
Term
Benchmarking
Definition
Process of comparing business processes and performance metrics to industry bests of best practices.
Term
Drivers of Competitive rivalry
Definition
Market commonality
Market Dynamics
-size
-growth
-structure
Resource similarity
Awareness
Motivation
Ability
Term
Continuous budgets maintain a (blank) to (blank) month projection into the future.
Definition
12 to 15
Term
What is the measurement criteria?
Definition
Determine what to measure

Establish standards

Measure actual performance

Compare actual vs standard

Take corrective action
Term
What performance measure does the Shareholder model use for a company
Definition
Maximizing profits
Term
What performance measure does the stakeholder model use for a company
Definition
Satisfy interests of stakeholders
Term
What are the 4 components of the Balanced Scorecard?
Definition
Financial

Customer

Innovation/Growth

Internal Processes
Term
Balanced Scorecard: How would you use it?
Definition
Get an objective

Get a measure

Set targets

Plan initiatives
Term
Name examples of financial performance measurements
Definition
ROA
ROS
ROI
Cash Flow
Profitability
Term
What is a strategy map?
Definition
A diagram that is used to document the primary strategic goals being pursued by an organization or management team
Term
Strategic Mapping may help to better:
Definition
Link strategic initiative and resources throughout the org

expose gaps and make multiple strategies more cohesive

integrate strategic and financial planning processes

add to the communication process through visual tools
Term
What are the blocks of the strategy tower?
Definition
Mission

Vision statement

Objectives

Strategy

"Campaigns"

Tactical Actions
Term
(common strategic rationales for an acquisition)
Overcapacity:
Definition
The acquiring company will eliminate capacity, gain market share and create a more efficient operation
Term
(common strategic rationales for an acquisition)
Geographic Expansion
Definition
A successful company expands geographically, operating units remain local
Term
(common strategic rationales for an acquisition)
Product or market expansion
Definition
Acquisitions extend a company's product line or its international exchange
Term
(common strategic rationales for an acquisition)
R&D
Definition
Acquisitions are used in lieu of in-house R&D to build a market position quickly
Term
(common strategic rationales for an acquisition)
Industry Convergence
Definition
A company bets that a new industry is emerging and tries to establish a position by culling resources from existing industries whose boundaries are eroding
Term
Equity Alliance leads to...
Definition
Partial ownership leads to stronger trust and ties
Term
What 3 factors should you consider before an Alliance or Acquisition?
Definition
1) Resources and synergies desired

2) Marketplace environment

3) Competencies at collaborating
Term
What are the arguments for Acquisitions?
Definition
Achieves horizontal integration

Achieves diversification when the company lacks important competencies

Supports quick move

Less risky than internal new ventures
Term
What are the arguments against Acquisitions?
Definition
Post acquisition integration is difficult and may be unanticipated

Economic benefits are often overestimated

Hard to estimate the power of hubris

Pre-screening is often rushed
Term
How do you value a firm?
Definition
Comparable Analysis: Revenues

or

DCF: PV of free cash flows
Term
Describe joint ventures
Definition
"try before you buy" concept

Stepping stone before full integration of partnership
Term
Know best practices:
Definition
Screen potential deals

Reach initial agreement

Conduct due diligence

Set final terms

Achieve closure
Term
Most mergers and acquisitions (x) shareholder value because anticipated synergies never materialize
Definition
(destroy)
Term
What are the most common reasons a firm would enter an alliance?
Definition
1) Strengthen competitive positions

2) enter a new market

3) hedge against uncertainty

4) access critical complementary resources

5) learn new capabilities
Term
What are the challenges of maintaining change?
Definition
Competition

Technology

Economic volatility

New regulations

New measurements

M&A's
Term
What are the 3 tensions every company faces?
Definition
Profitability vs Growth -business model/strategy

ST vs LT -management model

Whole vs Part -organizational model
Term
Who quoted this?

"You know, I'm all for progress. It's change I object to."
Definition
The Mark Twain Dillemma: Theory/Practice of Change leadership

-Mark Twain
Term
What are the FUD factors?
Definition
Fear

Uncertainty

Doubt
Term
What are the 6 rules for success?
Definition
1) Create a simple compelling case for change

2) Communicate constantly ad honestly throughout the whole process

3) Maximize participation

4) If all else fails, remove those who resist

5) Generate short term wins

6) Set an example
Term
What are the 7 S's?
Definition
Structure

Strategy

Skills

Staff

Style

Super-ordinate goals

Systems
Term
What reading is this quote from?

"The essence of strategy lies in creating tomorrow's competitive advantage faster than competitors mimic the ones you possess today"

-Gary Hamel & CK Prahalad
Definition
Unconventional insights for managing stakeholder trust
Term
What are the 4 key things to have to manage stakeholder trust?
Definition
Trust

Technical competence

Transparency

Value congruence
Term
What are Porters 5 forces?
Definition
Threat of Rivals

Threat of substitutes

Barriers to entry

Bargaining power of Suppliers

Bargaining power of buyers
Term
PESTEL, what are the things?
Definition
Political

Economical

Sociocultural

Technological

Ecological

Legal
Term
What are the stages of the industry life cycle?
Definition
Embryonic

Growth

Shakeout

Mature

Decline
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