chap 5: corporate strategies

Question 1

essentially external growth strategies

Answer 1

INTEGRATIVE GROWTH STRATEGIES

Question 2

involve investing the resources of the organization in another company or business to achieve growth goals

Answer 2

INTEGRATIVE GROWTH STRATEGIES

Question 3

• essentially acquisition strategies

Answer 3

INTEGRATIVE GROWTH STRATEGIES

Question 4

is a strategy where the organization acquires another competing business. Organizations may employ _ to eliminate real or potential competitors because some competitors can present themselves as deadly threats to an organization.

Answer 4

Horizontal Integration

Question 5

is the process of consolidating into an organization other companies involved in all aspects of a product’s or service’s process from raw materials to distribution. It is adopted by an organization to gain control over its suppliers and distributors, to increase the company’s market share, to minimize transaction and inventory costs, and to insure adequate stocks in the retail stores.

Answer 5

. Vertical integration

Question 6

is when the organization buys one of its suppliers. An organization may carry out it to better control its supply chain and ensure a more reliable or cost-effective supply of input: eliminate inefficiencies; secure quality outputs or according to set conformance standards; help increase the profitability of an organization; and thus, create competitive advantage.

Answer 6

• Backward Integration

Question 7

is when the organization buys distribution companies that are part of its distribution chain. In effect, the organization is able to remove the intermediary, thus, eliminating distribution costs. It allows an organization to reinvent its marketing outlook and redesign its marketing strategies.

Answer 7

• Forward Integration

Question 8

started to make its impact on corporate strategy in the early 1970’s.

Answer 8

The Boston Consulting Group Growth/Share Paradigm

Question 9

developed this model, called the BCG model.

Answer 9

Bruce Henderson of the Boston Consultant Group

Question 10

classifies the products or business units of an organization in terms of two parameters, namely, market share and market growth in relation to the marketing leader.

Answer 10

The BCG model

Question 11

is the relative sales percentage of a company in relation to the total sales percentage of the market in consideration.

Answer 11

Market share

Question 12

refers to an increase in demand over time. It may be high or low.

Answer 12

Market growth

Question 13

• A high market share in a high market growth defines _. They are the market leaders and if the market continues to grow, they are likely to become cash cows.

Answer 13

stars

Question 14

A high market share in a low market growth defines _. Since they are the market leaders in a mature market growth, establishing a competitive advantage can generate a lot of cash flow and bring about high profit margins

Answer 14

cash cows

Question 15

A low market share in a high market growth defines _. These essentially new products need promotional strategies.

Answer 15

question mark

Question 16

A low market share in a low market growth defines _. They should essentially be minimized, if not avoided. They can be expensive to the company.

Answer 16

dogs

Question 17

conceptualized the General Electric (GE) Model for the company.

Answer 17

McKinsey

Question 18

This model is an improvement of the BCG Model, in that it is used to assess the strength of a strategic business unit (SBU) of an organization.

Answer 18

ge model

Question 19

It takes into consideration two parameters to determine the overall strength of an SBU: _ _

Answer 19

ge model - market attractiveness and business strength.

Question 20

Organizations pursue it for external business expansion.

Answer 20

GLOBAL STRATEGIES Global strategies cover three main areas: international, multinational, and global.

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Question 21

Companies who might want to sell their excess products outside their home markets pursue

Answer 21

international strategies

Question 22

A company can engage in _ when it is involved in a number of markets outside the home country. The challenge in undertaking in this is to sell competitive and distinct products and services that are suited to the customer demands of different countries.

Answer 22

multinational strategies

Question 23

, the company treats or considers the world as a whole, one market and one source of supply with slight local variations.

Answer 23

In global strategies