Corporate Strategy Flashcards
The purchase of a company that is completely absorbed by the acquiring corporation.
Acquisition
Assuming a function previously provided by a supplier.
Backward integration
A retrenchment strategy that forfeits management of the firm to the courts in return for some settlement of the corporation’s obligations.
Bankruptcy
A simple way to portray a corporation’s portfolio of products or divisions in terms of growth and cash flow.
BCG (Boston Consulting Group) Growth Share Matrix
A type of international entry option for a company. After building a facility, the company operates the facility for a fixed period of time during which it earns back its investment, plus a profit.
BOT (build-operate-transfer) concept
Dedicating a firm’s productive capacity as primary supplier to another company in exchange for a long term contract.
Captive company strategy
A product that brings in far more money than is needed to maintain its market share.
Cash cow
A corporate growth strategy that concentrates a corporation’s resources on competing in one industry.
Concentration
A diversification growth strategy in which a firm uses its current strengths to diversify into related products in another industry.
Concentric diversification
A diversification growth strategy that involves a move into another industry to provide products unrelated to its current products.
Conglomerate diversification
A corporate strategy that evaluates the corporation’s business units in terms of resources and capabilities that can be used to build business unit value as well as generate synergies across business units.
Corporate parenting
A strategy that states a company’s overall direction in terms of its general attitude toward growth and the management of its various business and product lines.
Corporate strategy
A corporate growth strategy that expands product lines by moving into another industry.
Diversification
A plan that is composed of three general orientations: growth, stability, and retrenchment.
Directional strategy
have low market share and do not have the potential (because they are in an unattractive industry) to bring in much cash.
Dogs
(sometimes called “problem children” or “wildcats”) are new products with the potential for success, but they need a lot of cash for development.
Question marks
are market leaders that are typically at the peak of their product life cycle and are able to generate enough cash to maintain their high share of the market and usually contribute to the company’s profits.
Stars
Shipping goods produced in a company’s home country to other countries for marketing.
Exporting
Assuming a function previously provided by a distributor.
Forward integration
An international entry strategy in which a firm grants rights to another company/individual to open a retail store using the franchiser’s name and operating system.
Franchising
A portfolio analysis matrix developed by General Electric, with the assistance of the McKinseMcKinseyy & Company consulting firm.
GE Business Screen
a firm internally makes 100% of its key supplies and completely controls its distributors.
full integration
An international entry option to build a company’s manufacturing plant and distribution system in an other country.
Green-field development
A directional strategy that expands a company’s current activities.
Growth strategies
A corporate growth concentration strategy that involves expanding the firm’s products into other geographic locations and/or increasing the range of products and services offered to current markets.
Horizontal growth
The degree to which a firm operates in multiple geographic locations at the same point in an industry’s value chain.
Horizontal integration
A corporate parenting strategy that cuts across business unit boundaries to build synergy across business units and to improve the competitive position of one or more business units.
Horizontal strategy
An independent business entity created by two or more companies in a strategic alliance.
Joint venture
the licensing firm grants rights to another firm in the host country to produce and/or sell a product.
licensing
The termination of a firm in which all its assets are sold.
Liquidation
Agreements between two separate firms to provide agreed-upon goods and services to each other for a specified period of time.
Long-term contract
Agreements through which a corporation uses some of its personnel to assist a firm in another country for a specified fee and period of time.
Management contract
A transaction in which two or more corporations exchange stock, but from which only one corporation survives.
Merger
A rivalry in which a large multi business corporation competes against other large multibusiness firms in a number of markets.
Multipoint competition
A decision to do nothing new; to continue current operations and policies for the foreseeable future.
No-change strategy
The manner in which management coordinates activities and transfers resources and cultivates capabilities among product lines and business units
Parenting strategy
a timeout—an opportunity to rest before continuing a growth or retrenchment strategy.
Pause/proceed-with-caution strategy
An approach to corporate strategy in which top management views its product lines and business units as a series of investments from which it expects a profitable return.
Portfolio analysis
The process of combining the higher labor skills and technology available in developed countries with the lower-cost labor available in developing countries.
Production sharing
A strategy that artificially supports profits by reducing investment and short-term discretionary expenditures.
Profit strategy
a company does not make any of its key supplies but purchases most of its requirements from outside suppliers that are under its partial control
Quasi-integration
Corporate strategies to reduce a company’s level of activities and to return it to profitability.
Retrenchment strategy
A retrenchment option used when a company has a weak competitive position resulting in poor performance.
Sell-out strategy
A type of vertical integration in which a firm internally produces less than half of its own requirements and buys the rest from outside suppliers.
Taper integration
Corporate strategies to make no change to the company’s current
direction or activities.
Stability strategy
A concept that states that the whole is greater than the sum of its parts; that two units will achieve more together than they could separately.
Synergy
A theory that proposes that vertical integration is more efficient than contracting for goods and services in the marketplace when the transaction costs of buying goods on the open market become too great.
Transaction cost economics
A plan that emphasizes the improvement of operational efficiency when a corporation’s problems are pervasive but not yet critical.
Turnaround strategy
Contracts for the construction of operating facilities in exchange for a fee.
Turnkey operation
A corporate growth strategy in which a firm takes over a function previously provided by a supplier or distributor.
Vertical growth
The degree to which a firm operates in multiple locations on an in
dustry’s value chain from extracting raw materials to retailing.
Vertical integration
The corporation has multiple business lines and it chooses to sell off a division with low growth potential
Divestment
