Corporate Strategies

Question 1

What is the difference between business strategy and corporate strategy?

Answer 1

Corporate strategy is concerned with where the business competes, and business strategy is concerned with how the business competes.

Question 2

What is vertical integration?

Answer 2

occurs when a firm takes complete control over one or more stages in the production or distribution of a product. E.G. Ikea purchased forestland in Romania, meaning they could manage would sustainably at affordable prices.

Question 3

What are the three scope dimensions?

Answer 3

vertical, geographical and product.

Question 4

What is the theory of COMPARATIVE advantage?

Answer 4

A country has a comparative advantage when they make intensive use of resources that are abundant in that country. E.G. Phillipines relatively more efficient in shoe production and electronic products, rather than automobiles. Whereas the US is better at manufacturing pharmaceuticals, than shirts or shoes.

Question 5

Explain Porter’s Diamond Framework

Answer 5

GERMAN CAR EXAMPLE
Factor condition: existence of specialist german car places for learning
Demand conditions: autobahn, home demand
Relating and supporting industries: Siemens –> cars
Strategy, structure and rivalry: competition from VW, Audi drives competition