College 1 Flashcards
What is corporate level strategy?
The way a company creates value through the configuration and coordination of its multimarket activities
What are 3 important aspects of the definition of corporat level strategy?
- Value creation as the ultimate purpose of corporate strategy
- The focus on the multimarket scope of the corporation (Configuration), including its product, geographic, and vertical boundaries.
- The emphasis on how the firm manages the activities and businesses that lie within the corporate hierarchy (Coordination)
Een gediversifieerde organisatie heeft 2 levels van strategie. Welke zijn dit?
Business level strategy (competitive strategy)
- How to create competitive advantage in each business in which the company competes
Corporate level strategy (company wide strategy)
How to create calue for the corporation as a whole
The business level strategy moet the corporate level strategy ondersteunen anders is er geen synergie
Teken deCorporate level triangle en licht deze toe
Resources, businesses and organization represent the foundations of corporate level strategy. Only when they align in pursuit of a vision, motivated by the appropriate goals and objectives, can they create corporate advantage.
Corporate Strategy is what makes the corporate whole add up to more than the sum of it business unit parts
Er is geen single best corporate level stategy
Corporate level stategy creëert waarde als de 5 elementen samenhangen.
Beschrijf de elementen van de corporate stratagy triangle . Vision, goals & objectives
- Vision is concerned with establishing a firm’s boundaries
- Goals refer to the qualitative intentions
- Objectives are specific, short, term, quantitative targets
Beschrijf de elementen van de corporate stratagy triangle: Resources
- The ultimate source of value creation, the building blocks of strategy
- They determine what a firm can do and what their market opportunities are
- Firms need different important resources in order to create distinctive strategies
Beschrijf de Businesses van de corporate stratagy triangle
The industries or markets in which a firm operates
The set of industries determines the extent to which firms can share resources
Beschrijf de Corporate office uit de corporate stratagy triangle
- Careful design of structure, systems and processes
- Headquarters are important, creating fit bewtween business units
Beschrijf de Corporate advantage uit de corporate stratagy triangle
Corporate advantage and corporate value can established when a firm’s businesses uinits are able to create more value within the firm than outside the firm as independent entities
Er zijn drie niveaus van diversificatie benoem en beschrijf deze
- Low levels of Diversification*
- *Single-business** >95% of revenues comes from a single business unit
Dominant-business Between 70% and 95% of revenue come from a single business unit
Moderate to High Levels of Diversification
Related-constrained <70% of revenuescomes from the dominant business and all businesses share linkages
Related linked
Less thang 70% of revenue comes from the dominant business and there are only limited links between businesses
Very high levels of diversification
Less than 70% of revenue comes from the dominant business, and there are no common links between businesses
What is Strategy according to Chandler, 1962?
Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of course of action and the allocation of resources necessary for carrying out these goals. Chandler, 1962,
Explain Strategy as a deliberate thinking process
A company can outperform rivals only if it can establish a difference it can preserve.
What are the strategic approaches towards complex and wicked Strategy Tensions?
Organizational Sense Making
Reasoning by Analogy
‘Reasoning by analogy is a common form of logic among business strategist. Facing a novel (and complex) opportunity or predicament, strategists think back to some similar situation they have faced or heard about, and they apply the lessons from that previous experience (direct or vicarious learning = Change in behavior due to the experience of observing a model).’ (Gavetti, Levinthal adn Rivkin, SMJ, 2005,p.693)
Open strategy
Ronald Coase on Why Firms Exist
- The “costs of using the price system” came to be called transaction costs.
- The main reason why it is profitable to establish a firm would seem to be that there is a cost of using the price mechanism.
- The size of the firm is not its output (Q) but the number of transactions or activities within its boundaries.
- Firms exist in order to economize on buying and selling everything.
- Firms exist to reduce transaction costs
Beschrijf Corporate Mission Elements