Chapter 9 Flashcards
business-level strategy
The strategy that builds competitive advantage in an identifiable market
corporate-level strategy (corporate strategy)
Strategy about how a firm creates value through the configuration and coordination of its multimarket activities
diversification
adding new businesses to the firm that are distinct from its existing operations
product diversification
entries into new product markets
geographic diversification
entries into new geographic markets
single business strategy
A strategy that focuses on a single product or service with little diversification
product-related diversification
Entries into new product markets and/or business activities that are related to a firm’s existing markets and/or activities
operational synergy
Synergy is derived by having shared activities, personnel, and technologies
product-unrelated diversification
Entries into industries that have no obvious product-related connections to the firm’s current lines of business
conglomerate
Product-unrelated diversifier
conglomeration
a strategy of product-unrelated diversification
financial synergy
the increase in competitiveness for each individual unit that is financially controlled by the corporate headquarters beyond what can be achieved by each unit competing independently as standalone firms
economies of scope (scope economies)
reduction in per unit costs and increases in competitiveness by enlarging the scope of the firm
internal capital market
the internal management mechanisms of a conglomerate firm that operates as a capital market inside the firm
diversification premium
increased levels of performance because of association with a product-diversified firm (also known as a conglomerate advantage)
diversification discount
reduced levels of performance because of association with a product-diversified firm (also known as a conglomerate discount)
International diversification
the number and diversity of countries in which a firm competes
anchored replicator
a firm that seeks to replicate a set of activities in related industries in a small number of countries anchored by the home country
multinational replicator
a firm that engages in product-related diversification and far-flung multinational expansion
far-flung conglomerate
a conglomerate firm that pursues both extensive product-unrelated diversification and extensive geographic diversification
classic conglomerate
a firm that engages in product-unrelated diversification within a small set of countries centered on the home country
divestiture
Selling off assets
Chapter 9 title
Diversifying and Managing Acquisitions Globally
