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Corporate Strategy > Part 2 > Flashcards

Part 2 Flashcards

1
Q

What are the four types op operational synergies?

A
  1. Consolidate
  2. Combine
  3. Customize
  4. Connect
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2
Q

Explain the operational synergy; Consolidate

A
  • similar resources
  • high modification

Eliminate redundancies
Get rid of stuff, (factory closures)

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3
Q

Explain the operational synergy; Combine

A
  • similar resources
  • low modification

Pooling unmodified activities

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4
Q

Explain the operational synergy; Customize

A
  • dissimilar resources
  • high modification

Modifying the value chain activities through specializing them to each other to increase their combined value
Joint product development
Solution selling, (sort of cross selling)

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5
Q

Explain the operational synergy; Connect

A
  • dissimilar resources
  • low modification

Cross selling
Product bundling
Sharing brands

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6
Q

Name the 4 reasons for diversifying

A
  1. Resource view
  2. Agency view
  3. Markt power view
  4. Risk and control view
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7
Q

Explain the resource view of diversifying

A

Resource view; to enhance capacity in productive factors and achieve economies of scale/scope + firm learning

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8
Q

Explain the agency view of diversifying

A

Agency view: to build a corporate empire and mitigate employment risks

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9
Q

Explain the market power view of diversifying

A

Market power view: to amplify negotiating power in the market

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10
Q

Explain the risk and control view of diversifying

A

Risk and control view: to ensure revenue stability and address market failures

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11
Q

Name the porter’s three tests of diversification

A
  1. How attractive is the industry?
  2. What is the cost of entry?
  3. Will the business be better of?
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12
Q

Name examples of tools for corporate strategy execution

A
  • internal development
  • corporate venture capital
  • alliances
  • acquisitions
  • divestitures
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13
Q

Common mistakes made during corporate diversification;

A
  1. Overestimating Resource Transferability
  2. Overestimating Entry capabilities
  3. Generic Resource Misconception
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14
Q

Absorptive capacity

A

Absorptive capacity posits that an organization must possess existing relevant knowledge to incorporate and effectively apply new knowledge

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15
Q

Wat are the factors to analyse before deciding on an acquisition or an alliance?

A

1 Resource of Synergy
2 Market Factors
3 Collaboration Capabilities

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16
Q

What is absorptive capacity?

A

The firm’s capabilties in recognition of external knowledge, and its assimilation and application in business

17
Q

What are the four main concepts of corporate strateg?

A
  1. Portfolio management
  2. Restructuring
  3. Transferring skills
  4. Shariny activities
18
Q

What are the three conditions to transferring skills?

A
  1. Similarities are large enough
  2. Skills are important contributors
  3. Skills create competitve advantage
19
Q

What are the three premises of corporate strategy?

A
  1. Competition occurs at BU level
  2. Diversification inevitably adds costs and constraints to BU
  3. Shareholders can readily diversify themselves, more easily than companies
20
Q

What is Internal stickiness?

A

Internal stickiness refers to the difficulty of conducting knowledge transfer in a company

21
Q

What are the four stages of the transfer process?

A
  1. Initation; need for knowledge
  2. Implementation stage; exchange of resources
  3. Ramp-up stage; applying the transfered knowledge
  4. Intergration stage; recipient exhibits statisfactory results, transfered knowledge becomes a routine
22
Q

What are the three most impactful reasons for internal stickiness?

A
  1. Lack of absorptive capacity
  2. Causal ambiguity
  3. Arduous/ complex relationships
23
Q

What are the 5 tests for a resource to be valuable?

A
  1. Inimitability
  2. Durability
  3. Appropraibility (who captures the value)
  4. Substitutability
  5. Competitive superiority
24
Q

What are the common mistakes made during corporate diversification?

A
  1. Overestimating resource transferability
  2. Overestimating entry capabilities
  3. Generic resource misconception
25
Q

What is knowledge codification?

A

Knowledge codification refers to the representation of knowledge to make it easily available and transferable so that it can be reused

26
Q

What is meant with the trade-off?

A

Trade-off; balance between necessary level of organization integration, and minimizing the disruptions to the acquired firm’s resources and competencies

27
Q

What are the three types of synergies?

A
  1. Modular synergy
  2. Sequential synergy
  3. Reciprocal synergy
28
Q

Reasons to engage in alliances

A
  1. Sharing risks
  2. Combining complementary skills and assets
  3. Gaining access to new markets
  4. Learning from partnership by broadening or deepening skills
29
Q

What are the two types of divesture?

A

1 sell off; unit is sold to another firm
2 spin off; unit becomes independent firm

30
Q

What are the five reasons behind M&A?

A
  1. Overcapacity
  2. Geographic Roll-up
  3. Product Extension
  4. R&D
  5. Industry Convergence
31
Q

What are the purposes of a financial synergy?

A
  • accessing capital markets on better terms
  • access a market listing
  • move to low tax location
  • benefit from tax abritrage
  • build internal capital markets
32
Q

Which types of CVA do you have?

A
  1. Portfolio management
  2. Restructuring
  3. Skill transfer
  4. Activity sharing

Corporate Strategy (3 decks)

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