5. Corporate Strategy and Portfolio Management Flashcards
What is Corporate Strategy?
Corporate strategy defines the strategic direction for the entire organization setting priorities for resource allocation and establishing targets.
What is the Ansoff Matrix?
A strategic planning tool that links an organization’s marketing strategy with its general strategic direction. (Market Penetration, Market development, Product Development, Conglomerate diversivication)
What is Market Penetration?
A strategy that implies increasing share of current markets with the current product range.
What is Product Development?
A strategy where an organization delivers modified or new products to existing markets.
What is Market Development?
A strategy that involves offering existing products to new markets.
What is Conglomerate Diversification?
A strategy that takes the organization beyond both its existing markets and products radically increasing the organization’s scope. (new markets/new products)
What is Synergy?
Benefits gained where activities or assets complement each other so that their combined effect is greater than the sum of the parts.
What is Vertical Integration?
Entering activities where the organization is its own supplier or customer.
What is Outsourcing?
The process by which activities previously carried out internally are subcontracted to external suppliers.
What is Parenting Advantage?
A concept where a corporate parent seeks to add value to its businesses by managing synergies across business units.
What is Conglomerate Discount?
An economic concept describing a situation where the stock market values a diversified group of businesses at less than the sum of its parts.
What is the BCG Portfolio Matrix?
A portfolio management tool that helps in decision-making by categorizing business units or products into four categories based on market growth and market share.
What is the McKinsey Portfolio Matrix?
A tool used to prioritize investment among a company’s business units using the criteria of industry attractiveness and business unit strength.
What are the key takeaways of Corporate Strategy?
Corporate strategy involves decisions and activities above the level of business units considering organizational scope/outsourcing diversification/ divestment/ and value addition by corporate parents.
Backward integration
refers to development into activities
concerned with the inputs into the company’s current business.
