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Ch.6 Business-Level Strategy and the Industry Environment
MGT 499 International Business Test 1
17
Management
Undergraduate 4
02/08/2019

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Cards

Term
Fragmented Industry
Definition

An industry composed of a large number of small- and medium-sized companies.

Term
Chaining
Definition

 

A strategy designed to obtain the advantages of cost leadership by establishing a network of linked merchandising outlets interconnected by information technology that functions as one large company.

Term
Franchising
Definition

A strategy in which the franchisor grants to its franchisees the right to use the franchisor’s name, reputation, and business model in return for a franchise fee and often a percentage of the profits.

Term
Mass Market
Definition

 

One in which large numbers of customers enter the market.

Term
Product Proliferation Strategy
Definition

The strategy of “filling the niches” or catering to the needs of customers in all market segments to deter entry by competitors.

Term
Limit Price Strategy
Definition

 

Charging a price that is lower than that required to maximize profits in the short run to signal

to new entrants that the incumbent has a low-cost structure that the entrant likely cannot match.

Term
Technology Upgrading
Definition

 

Incumbent companies deterring entry by investing in costly technology upgrades that potential entrants have trouble matching.

Term
Strategic Commitments
Definition

 

Investments that signal an incumbent’s long-term commitment to a market or a segment of that market.

Term
Price Signaling
Definition

 

The process by which companies increase or decrease product prices to convey their intentions to other companies and influence the price of an industry’s products.

Term
Price Leadership
Definition

When one company assumes the responsibility for determining the pricing strategy that maximizes industry profitability.

Term
Non-Price Competition
Definition

The use of product differentiation strategies to deter potential entrants and manage rivalry within an industry.

Term
Product Development
Definition

The creation of new or improved products to replace existing products.

Term
Market Development
Definition

When a company searches for new market segments for its existing products in order to increase sales.

Term
Leadership Strategy
Definition

When a company develops strategies to become the dominant player in a declining industry.

Term
Niche Strategy
Definition

When a company focuses on pockets of demand that are declining more slowly than the industry as

a whole to maintain profitability.

Term
Harvest Strategy
Definition

 

When a company reduces to a minimum the assets it employs in a business to reduce its cost structure and extract (“milk”) maximum profits from its investment.

Term
Divestment Strategy
Definition

 

When a company exits an industry by selling its business assets to another company.

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