Term
| Two issues addressed by corporate level strategy |
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Definition
| what businesses should a corporation compete in and how can these businesses be managed |
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Term
| four means of creating value |
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Definition
| leveraging core competencies, sharing activities, pooled negotiating power, and vertical integration |
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Term
| Other ways to create value |
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Definition
| restructuring, corporate parenting, and portfolio analysis approach |
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Term
| what does corporate level strategy focus on? |
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Definition
| gaining long term revenue, profits, and market value through managing operations in multiple businesses |
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Term
| types of diversification initiatives |
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Definition
| mergers and acquisitions, strategic alliances and joint ventures, internal development |
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Term
| Two broad categories of diversification |
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Definition
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Term
| Two types of related deversification |
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Definition
| economies of scope and market power |
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Term
| three types of unrelated diversification |
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Definition
| parenting, restructuring and financial synergies |
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Term
| two ways to achieve economies of scope |
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Definition
| leveraging core competencies and sharing activities |
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Term
| two ways to achieve market power |
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Definition
| pooled negotiating power and vertical integreation |
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Term
| two ways to achieve parenting, restructuring, and financial synergies |
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Definition
| corporate restructuring and parenting, and portfolio management |
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Term
| benefits of vertical integration |
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Definition
| secure source of raw materials or distribution channels, protection of and control over valuable assets, access to new business opportunities, simplified procurement and administrative procudures |
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Term
| risks of vertical integration |
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Definition
| costs and expenses associated with increased overhead and capital expenditures, loss of flexibility, unbalanced capacities, additional admin costs |
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Term
| when do you resort to market transactions over vertical integration |
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Definition
| when transaction costs are lower than admin costs |
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Term
| when do you chose vertical integration over market transactions? |
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Definition
| if transaction costs are higher than admin costs |
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Term
| what is the parenting advantage? |
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Definition
| positive contributions of the corporate office |
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Term
| three primary types of restructuring activities |
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Definition
| assets, capital, management |
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Term
| what is the key purpose of the portfolio model? |
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Definition
| to assist a firm in achieving a balanced portfolio of businesses |
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Term
| four quadrants of the BCG portfolio matrix |
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Definition
| Stars, Question Marks, Cash Cows, Dogs |
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Term
| four ways corporations use a portfolio strategy to create shareholder value |
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Definition
1.provides a snapshot of the businesses in a corporation's portfolio
2.the provides guidance in determining what firms may be attractive acquisitions
3.provides financial resources to the business units on favorable terms
4.provides high qualitiy review
5.provides a basis for developing strategic goals |
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Term
| limitations of portfolio models |
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Definition
| overly simplistic, ignore potential synergies across businesses, overly mechanical process, reliance on strict rules, imagery may lead to overly simplistic prescriptions |
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Term
| three anti-takeover tactics |
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Definition
| greenmail, golden parachute, poison pill |
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Term
| four factors of the diamond of national advantage |
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Definition
| factor endowment; demand conditions; related and supporting industries; firm straregy structure, and rivalry |
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Term
| motivations for international expansion |
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Definition
| increase market size; arbitrage; extend a products life cycle; optimize the location of value chain activities; explore reverse innovation |
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Term
| risks of international expansion |
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Definition
| political and economic; currency risk; management risks; |
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Term
| two growing trends in today's economy |
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Definition
| outsourcing and offshoring |
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Term
| two opposing pressures to achieving competitive advantage in global markets |
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Definition
| reducing costs and adapting to local markets |
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Term
| characteristics of international strategy |
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Definition
| low local responsiveness, little low cost pressure |
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Term
| strengths of international strategy |
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Definition
| leverage and diffusion of a parents firms knowledge and core comptenencies |
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Term
| weaknesses of international strategy strategy |
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Definition
| limited ability to adapt to local markets, inability to take advantage of new ideas and innovations occuring in local markets |
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Term
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Definition
| firm is centralized, primary emphasis is on cost, low pressure for local responsiveness |
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Term
| strengths of a global strategy |
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Definition
| strong integration across various businesses; achieves economies of scale; uniform standards |
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Term
| limitations of global strategy |
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Definition
| limited adaptation ot local markets; concentration of activites my increase dependence on a single factility; higher tariffs and transportation costs |
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Term
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Definition
| based on differentiation to local markets, low cost pressures are low |
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Term
| strengths of multidomestic strategy |
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Definition
| adaptation to local markets; detect potential opportunities for attractive niches in a give market |
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Term
| limitations of multidomestic strategy |
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Definition
| high costs; difficult to transfer knowledge; may lead to overadaptation |
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Term
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Definition
optimiyes the trad offs associated with efficiency, local responsiveness, and learning.
low cost and local responsiveness are important |
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Term
| strengths of transnational |
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Definition
| economies of scale; local responsiveness; optimal locations; flow of knowledge |
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Term
| limitations of transnational |
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Definition
| challenges in determining optimal locations of activities; unique managerial challenges |
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Term
| types of international entry modes |
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Definition
| exporting, licensing, franchising, strategic alliance, joint venture, wholly owned subsidiary |
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Term
| entrepreneurship refers to what? |
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Definition
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Term
| new value can be created in what 5 contexts? |
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Definition
start-up ventures
major corporations
family owned busninesses
non-profit organizations
established institutions |
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Term
| four qualitites that make opportunity viable: |
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Definition
attractive
acheivable
durable
value creating |
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Term
| four entrepreneurial resources |
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Definition
financial resources
human captial
social capital
government resources |
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Term
| Three characteristics of leadership an entrepreneur must embody: |
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Definition
vision
dedication and drive
commitment to excellence |
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Term
| two ways a new entrant can evaluate risk of other new entrants |
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Definition
examine barrieers to entry
threat of retaliation by incumbents |
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Term
| three entry strategies used by entrepreneurs |
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Definition
pioneering new entry
imitative new entry
adaptive new entry |
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Term
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Definition
| intense rivalry among similar competitors |
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Term
| Reasons to launch new comptetive action |
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Definition
improve market postition
capitlize on growing demand
prive an innovative new solution
obtain first move advantages |
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Term
| two factors used to asses whether companies are close competitors or not: |
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Definition
market commonality
resource similartity |
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Term
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Definition
devastate rivals' profit
Plagiarize with pride
deceive the competition
unleash massive and overwhelming force
raise competitors' costs |
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Term
| tow broadly defined types of competitive action |
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Definition
strategic actions
tactical actions |
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Term
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Definition
| major commitments of distinctive and specific resources to strategic initiatives |
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Term
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Definition
| refinements or extensions of strategies usually involoing minor resource commitemnts |
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Term
| four types of strategic actions |
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Definition
entering new markets
new product introductions
changing production capacity
mergers/alliances |
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Term
| four types of tactical actions |
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Definition
price cutting
product/service enhancements
increased marketing efforts
new distribution channels |
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Term
| Three factors that affect a competitors response |
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Definition
market dependence
competitor's resources
actor's reputation |
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Term
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Definition
| a firm's choice of not reacting to a rival's new competitive action |
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Term
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Definition
| a firm's strategy of both cooperating and cometing with rival firms |
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Term
| Two central aspects of strategic control: |
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Definition
information control
behavioral control |
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Term
| three steps of traditional strategic control |
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Definition
formulate strategies and goals
strategies are implemented
performance is measured |
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Term
| what is an integral part of strategic control? |
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Definition
| adapting to and anticipating both internal nd external envirnomental change |
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Term
| synonym for informational control |
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Definition
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Term
| synonym for behavioral control |
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Definition
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Term
| two key issues with informational control |
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Definition
managers must scan and monitor the external environment
conditions can change in the internal environment of the firm |
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Term
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Definition
| inromation control is part of an ongoing process of organizational learning that continuously updates and challenges the assumptions that underlie the organization's strategy |
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Term
| 4 characteristics that contemproary control systems need to be effective |
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Definition
focus on chaning information
frequent and regular attention from all levels of the organization
data must be interpreted in face-to-faxce meetings
is a catalyst for an ongoing debte about underlying data, assumptions, and action plans |
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Term
| three key control levers for attaining behavioral control |
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Definition
culture
rewards
boundaries |
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Term
| two reasons for emphasis on culture and rewards |
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Definition
environment demands both flexibility and quick response
the implicit long term contract between the organization and its key employees has been eroded |
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Term
| 6 characteristics of effective reward and evaluation systems |
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Definition
obj are clear, well understood and broadly acedpted
rewards are clearly linkied to performance and desired behaviors
performance measures are clear and highly visible
feedback is prompt, clear, and unambiguous
the compensation system is perceived as fair and equitable
the structre is flexible and can adapt to changing circumstances |
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Term
| purposes of boundaries and constraints |
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Definition
focusing individual efforts on strategic priorities
providing short-term objectives and action plans to channel efforts
improving efficiency and effectiveness
minimizing improper and unethical conduct |
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Term
| three attributes of short term obj |
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Definition
specific and measurable
specific time horizon
acheivable yet challenging |
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Term
| When are rule-based controls most appropriate |
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Definition
environments are stable and predictable
employees are largely unskilled and interchangeable
consistency in product and service is critical
the risk of malfeasance is extremely high |
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Term
| three basic policies that create the right monetary incentives for CEO's |
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Definition
require CEO to owner substantial stock
salaries, bonuses, and stock options restructured
threat of dismissal for poor performance is realistic |
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Term
| two schools of thought on CEO duality |
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Definition
unity of command
agency theory |
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Term
| Four types of principal-principal and principal to agent conflicts |
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Definition
goal incongruence
ownership pattern
manifestations
institutional protection of minority shareholders |
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Term
| structure provides a means of balancing what two conflicting forces |
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Definition
a need for the dividion of tasks into meaningful groupings
the need to integreate such groupings in order to ensure efficiency and effectiveness |
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Term
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Definition
simple
functional
divisional
internation |
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Term
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Definition
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Term
| advantages of simple structue |
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Definition
informal
centralized
little specialization of tasks
few rules
informal evaluationand reward systems |
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Term
| disadvantages of simple structure |
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Definition
not clearly defined roles
take advantage of lack of regulations
limit opportunities for upward mobility |
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Term
| advantages of fuctional structure |
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Definition
pooling of specialists
cetralized decision making
efficient us e of managerial and technical talets
facilitates career paths and professional development in specialized areas |
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Term
| disadvantages in functional structure |
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Definition
differences in fuctional area orientation impede communication
tendancy for specialists to develop short-term perspective
conflicts may overburden top managers
difficult to establish uniform perfomance standards |
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Term
| two degrees of innovativeness |
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Definition
radical innovations
incremental innovations |
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Term
| two sub-types of innovations |
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Definition
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Term
| five dilemmas that companies must wtestle with when pursueing innovations |
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Definition
seeds vs weeds
experience versus intitiative
internal vs external staffing
buidling capabilities vs collaborating
incremental vs preemptive launch |
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Term
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Definition
| a frim specific view of innovation that defines how a firm can create new knowledge and learn from an innovation intitiative even if the project fails |
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Term
| 5 traits inherant in an innovator's DNA |
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Definition
associating
questioning
observing
experimenting
networking |
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Term
| two primary aims of corporate entrepreneurship |
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Definition
the pursuit of new venture opportunities
strategic renewal |
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Term
| 6 rules for fostering innovation |
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Definition
the power of small teams
no ranks, titles or bosses
take the long view
make time for face time
lead by leading
clelbrate failure |
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Term
| two approaches to corporate venturing |
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Definition
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Term
| five funitons provided by incubators |
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Definition
funding
physical space
business services
mentoring
networking |
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Term
| two critical stages passed through by new venture concepts before approval |
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Definition
project definition
project impetus |
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Term
| three options for each step of real options analysis |
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Definition
investing additional funds to grow or accelerate
delaying
shrinking the sale
abandoning the activity |
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Term
| dimensions of entrepreneurial orientation |
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Definition
autonomy
innovativeness
proactiveness
competitive aggressiveness
risk taking |
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