Chapters 6 and 11

Question 1

What are the two levels of strategy

Answer 1

Business-level
Corporate-level (more important in large firms)

Question 2

What are the levels and their types of diversification

Answer 2

Low: single and dominant business
Moderate-High: related constrained & related linked
Very High: unrelated (yamaha example)

Question 3

What is operational relatedness

Answer 3

sharing a primary activity or a support activity

Question 4

What is corporate relatedness

Answer 4

linking different business through managerial & tech knowledge, experience and expertise

Question 5

What is market power

Answer 5

when a firm can sell its products above existing competitive level and or reduce costs of its primary & support activities below the competitive level

Question 6

What is a way to achieve market power?

Answer 6

Through vertical integration

Question 7

What is unrelated diversification.

Answer 7

cost savings realized through improved allocations of financials resources

Question 8

What is the strategy & structure growth pattern

Answer 8

simple structure –> sales growth-coordination & control problems –> functional structure –> sales growth-coordination & control problems –> multidivisional structure

Question 9

What is organizational structure

Answer 9

firms formal reporting relationships, procedures, controls, authority, & decision making processes

Question 10

What are the common reasons startegies fail

Answer 10

not understanding the problem, the organizations capabilities, the immovable pressures, and the cultural landscape