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CBAC102 Finals Reviewer > Strategy Formulation > Flashcards

Strategy Formulation Flashcards

1
Q

to gain competitive advantage with an industry by working with other firms

A

Cooperative Strategies

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1
Q

is the active cooperation of firms within
an industry to reduce output and raise prices in
order to get around the normal economic law of
supply and demand.

A

Collusion

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2
Q

is a long term cooperative
arrangement between two or more independent
firms or business units that engage in business
activities for mutual economic gain.

A

Strategic Alliances

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3
Q

2 Basic Concentration Strategies

A

Vertical Growth
Horizontal Growth

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4
Q

it grows by making its own supplies and
/ by distributing its own products.

A

Vertical Growth

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5
Q

seeking ownership or
increased control of firm’s suppliers.

A

Backward integration

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6
Q

gaining ownership or increased control over distributors or retailers.

A

Forward integration

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7
Q

a firm internally makes 100% of its key supplies and completely control its distributors.

A

Full Integration

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8
Q

a firm internally produces less than half of its
own requirements and buys the rest from
outside suppliers.

A

Taper Integration (concurrent sourcing)

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9
Q

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.

A

Quasi-Integration

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10
Q

are agreements between two firms to provide agreed upon goods and services to each other for a specified period of time.

A

Long Term Contracts

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11
Q

expanding its operations into other geographic locations and / or by increasing the range of products & services
offered to current markets.

A

Horizontal Growth

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12
Q

shipping goods produced in the company’s
home country to other countries for marketing.

A

Exporting

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13
Q

the firm grants rights to another firm in the host country to produce and sell a product.

A

Licensing

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14
Q

the firm grants rights to another company to open a retail store using the franchiser’s
name and operating system

A

Franchising

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15
Q

between a foreign corporation & a domestic company is the most popular strategy used to enter a new country.

A

Joint Ventures

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16
Q

purchasing another company.

A

Acquisition

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17
Q

the company doesn’t want to purchase another company’s problems along with its assets and build its own manufacturing plant and distribution system.

A

Greenfield Development-

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18
Q

process of combining the higher labor skills and technology available in developed countries with the lower cost.

A

Production Sharing

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19
Q

are typically contracts for the construction of operating facilities in exchange for a fee.

A

Turnkey Operations

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20
Q

corporation can use some of its personnel to assist a firm in a host country for a specified fee and period of time.

A

Management Contracts

21
Q

happens when opportunities for growth depleted.

A

Diversification Strategies

22
Q

by focusing on its distinctive competence & uses it for
diversification.

A

Concentric Diversification

23
Q

diversifying to an industry unrelated to its current one.

A

Conglomerate Diversification

24
Q

continuing its current activities without any significant change in direction.

A

STABILITY STRATEGIES

25
Q

an opportunity to rest before continuing a
growth or retrenchment strategy.

A

Pause/ proceed with caution strategy

26
Q

is a decision to do nothing new.

A

No-change Strategy

27
Q

is a decision to do nothing new in a worsening situation but instead to act as though the company’s problems are only temporary.

A

Profit Strategy

28
Q

it is applicable when it has a weak competitive position in some or all of its product lines resulting in poor performance.

A

RETRENCHMENT STRATEGIES

29
Q

emphasizes the improvement of operational efficiency & its probably most appropriate when a corporation’s problems are pervasive but not yet critical.

A

Turn Around Strategy

30
Q

involves giving-up independence in exchange for security.

A

Captive Company Strategy

31
Q

involves giving-up the management of the firm to the courts in return for some settlement of the corporation’s obligations.

A

Bankruptcy/ Liquidation Strategy

32
Q

the corporation has multiple business lines & it chooses to sell off a division with low growth potential.

A

Sell out / Divestment Strategy

33
Q

top management views its product lines & business units as a series of investments from which it express a profitable return.

A

PORTFOLIO ANALYSIS

34
Q

ADVANTAGES OF PORTFOLIO ANALYSIS

A

It encourages top management to evaluate each of
the corporation’s businesses individually & to set
objectives and allocate resources for each.

It stimulates the use of externally oriented data to
supplement management’s judgment.

It raises the issue of cash flow availability for use in
expansion & growth.

35
Q

it views a corporation in terms of resources & capabilities that can be used to build business unit value as well as
generate synergies across business units.

A

CORPORATE PARENTING

36
Q

Business Strategies
2 Generic Competitive Strategies by Michael Porter

A

Lower Cost Strategy
Differentiation Strategy

36
Q

3 ANALYTICAL STEPS IN DEVELOPING A CORPORATE PARENTING STRATEGY

A

Examine each business unit in terms of its
strategic factors.

Examine each business unit in terms of areas in
which performance can be improved.

Analyze how well the parent corporation fits with
the business unit.

37
Q

is the ability of a company or a business unit to design, produce and market a comparable product more efficiently than its competitors.

A

Lower Cost Strategy

38
Q

is the ability of a company to provide unique and superior value to the buyer in terms of product quality, special features or after sales service

A

Differentiation Strategy

39
Q

first mover/pioneer that establish a reputation as an industry leader.

A

Timing Tactic

39
Q

deals with where a company implement a strategy.

A

Market Location Tactics

39
Q

is a specific operating plan that details how a strategy is to be implemented in terms of when & where it is to be put into action.

A

Tactics

40
Q

TACTICS USED TO IMPLEMENT COMPETITIVE
STRATEGIES

A

Timing Tactic
Market Location Tactics

41
Q

METHODS USED TO ATTACK COMPETITOR’S POSITION

A

Frontal Assault
Flacking Maneuver
Bypass attack
Encirclement

42
Q

The attacking firm goes head to head with its competitor.

A

Frontal Assault

43
Q

a firm may attack a part of the market where the competitor is weak.

A

Flacking Maneuver

44
Q

this tactic attempts to cut the market out from under the established defender by offering a new type of product that makes the competitor’s product unnecessary.

A

Bypass attack

45
Q

it occurs as an attacking company or unit encircles the competitor’s position in terms of products or market or both.

A

Encirclement

46
Q

It accepts small gains and avoid pushing the
establish competitor to the point that it must respond/else lose face.

A

Guerilla warfare

CBAC102 Finals Reviewer (3 decks)

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