Decisions Flashcards
1
Q
Advantages of transnational strategy
A
- Local responsiveness and global integration
- Transfer and share resources and capabilities across borders
- Flexible coordination (allows for differences in different locations)
- Better use and alignment of the global advantage diamond
2
Q
Disadvantages of transnational strategy
A
- Complex and harder to implement
- Conflicting goals and trade-offs
- Costly and time-consuming implementation
3
Q
Matrix structure advantages
A
- Enhancing cross-unit communication, collaboration and coordination
- Facilitate the sharing of plant and equipment specialised knowledge, and other resources
- Flexibility and better oversight as supervision is provided from more than one perspective
4
Q
Global Advantage Diamond
A
- Market access (growth advantage)
- Resource access (leverage advantage)
- Local adaptations (manyness advantage - adapting to needs of new customers)
- Network coordination (integration advantage - capitalise global reach by integrating operations)
5
Q
Diversification traps
A
(use for transformational business)
- The more diversified, the more complex to manage (increased bureaucracy)
- Resources start being allocated for the wrong reasons and in wrong places
- Bureaucracy stifles innovation, leading to short-termism
6
Q
When is focused differentiation a good strategy?
A
- Target market niche is big enough to be profitable and offers good growth potential
- Industry has many different niches and segments
7
Q
Focused differentiation disadvantages
A
- Competitors outside niche find effective ways to match the focused firm’s capabilities in serving the target niche
- Segment becomes so attractive that it is inundated with competitors, intensifying rivalry and splintering segment profits
8
Q
Disadvantages of alliances
A
- Partner will gain access to company’s proprietary knowledge, technology or trade secrets
- Becoming dependent on partner for essential expertise and capabilities
- Cultural clash and integration issues (e.g. management styles)
9
Q
Divestment candidates for restructuring
A
- Those in unattractive industries
- Lack strategic fit with core/adjacent businesses
- Incompatible with revised diversification strategy (transformational)
10
Q
Why should Lavazza shift to product development?
A
Take advantage of recent acquisitions to improve product development capabilities
11
Q
Implications for franchising
A
- Maintaining quality control; franchisees lack strong commitment to consistency/standardisation
- Whether franchisees should make modifications to franchisor’s product offerings to better satisfy tastes and expectations of local buyers
12
Q
How should Lavazza make use of alliances
A
- Small/new coffee shops in foreign markets with strong coffee shop culture/demand (e.g. China)
- Product launch collaborations (e.g. enhanced water, tea brands)
- Provide them with Lavazza’s coffee: they create their own drinks and Lavazza is advertised on menu/cups
13
Q
Benefits of alliances
A
- Gain knowledge of unfamiliar markets/cultures
- Access valuable skills and competencies
- Gain new tech and build new expertise and competencies faster
- Lower investment costs and risks
- Flexible, speedy and adaptive responses to changing conditions
14
Q
Alliance formation and selection (key drivers of success)
A
- Partner complementarity
- Partner compatibility
- Partner commitment
15
Q
Potential strategic partners
A
- Industry insiders (direct horizontal relations)
- Industry outsiders (indirect horizontal relations)
- Socio-cultural actors
- Technological actors
16
Q
When to disperse to many locations
A
- Trade barriers make central location too expensive
- Reduces exchange rate risks
- Prevent supply interruptions
- Avoid adverse political developments
17
Q
When to diversify
A
- Tech/products that complement current business
- Leverage resources/capabilities where these are valuable competitive assets
- Reduce costs via cross-business-sharing or transfer of competitively valuable resources/capabilities
- Well-known name can be transferred to products of other businesses
18
Q
Choosing mode of entry (internal, alliance, acquire)
A
- Does organisation have all resources and capabilities to enter the market?
- Are there entry barriers?
- Is speed important to enter?
- Least costly mode of entry
19
Q
Cross-business strategic fit along value chain
A
- Supply chain activities
- RandD and Tech activities
- Manufacturing-related
- Sales and Marketing
- Distribution-related
20
Q
Economies of scope and competitive advantage from greater relatedness in diversification
A
- Achieve lower costs by combining related value chain activities
- Transfer skills and knowledge
- Use well-respected brand name or other differentiation-enhancing resources
- Cross-business collaboration to create new resources/capabilities and drive innovation
