Session 9

Question 1

Strategic business unit

Answer 1

supplies goods or services for a distinct domain of activity

Question 2

Corporate strategy

Answer 2

the choice of direction of the firm as a whole

Question 3

Directional strategy

Answer 3

the firm’s overall orientation toward growth

Question 4

Portfolio analysis

Answer 4

industries in which the firm competes through its products and
business unites

Question 5

Parenting strategy

Answer 5

which management coordinates activities

Question 6

Corporate strategy directions

Answer 6

-market penetration (existing products and existing markets)
-new products and services (new products and existing markets)
-market development (existing products and new market)
-conglomerate diversification (new products and new markets)

Question 7

Diversification

Answer 7

involves increasing the range of products or markets served by an organisation.

Question 8

Related diversification

Answer 8

diversifying into products or services with relationships to the existing businesses

Question 9

Conglomerate diversification (unrelated)

Answer 9

diversifying into products or services new to the existing market

Question 10

Market penetration

Answer 10

increasing share of current markets with current product range
-strategic capabilities, scope is unchanged, increased power and economies of scale

Question 11

corporate directional strategies

Answer 11

• growth
  _ concentration (vertical and horizontal growth)
  _Diversification (concentric and conglomerate)
• stability
• retrenchment

Question 12

Directional strategy

Answer 12

-growth strategies
-stability strategies
-retrenchment strategies
-merger
-acquisition

Question 13

Concentration strategies

Answer 13

-vertical growth
-vertical integration
-backward integration
-forward integration
-full integration
-taper integration
-quasi-integration
-long-term contracts
-horizontal growth
-horizontal integration

Question 14

Diversification strategies

Answer 14

-concentric (related)
growth into a related industry when a firm has a strong competitive
position
-conglomerate (unrelated)
diversifying into an industry unrelated to its current one

Question 15

stability strategies

Answer 15

-pause/proceed with caution
opportunity to rest before continuing growth
-no-change
do nothing new
-profit strategy
decision to do nothing new

Question 16

Retrenchment strategies

Answer 16

used when the firm has a weak competitive position
-contraction
-consolidation
-sell-out
-divestment
-bankruptcy
-liquidation

Question 17

portfolio analysis

Answer 17

management views its product lines and business units as a series of investments

Question 18

BCG Growth-share matrix

Answer 18

-question mark
new products with potential for success but need money to development
-stars
market leaders that can generate enough cash to maintain
-cash cows
bring more money that is needed low market growth rate
-dogs
low market share and don’t have potential to bring cash

Question 19

corporate parenting

Answer 19

views a corporation in terms of resources and capabilities
-focusing on the core competencies of
the parent corporation

Question 20

Horizontal strategy

Answer 20

cuts across business unit boundaries to build synergy across business
units and to improve competitive position

Question 21

Multipoint competition

Answer 21

-large multi-business corporation compete against other large multi-business firms