Strategy Formulation: Corporate Strategy

Question 1

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

Answer 1

Cooperative Strategies

Question 2

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.

Answer 2

Collusion

Question 3

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

Answer 3

Vertical Growth

Question 4

seeking ownership or increased control of firm’s suppliers.

Answer 4

Backward Integration

Question 5

gaining ownership or increased control over distributors or retailers.

Answer 5

Forward Integration

Question 6

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

Answer 6

Full Integration

Question 7

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

Answer 7

Taper Integration (concurrent sourcing)

Question 8

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.

Answer 8

Quasi-Integration

Question 9

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

Answer 9

Long Term Contracts

Question 10

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

Answer 10

Horizontal Growth

Question 11

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

Answer 11

Exporting

Question 12

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

Answer 12

Licensing

Question 13

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

Answer 13

Franchising

Question 14

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

Answer 14

Joint Ventures

Question 15

purchasing another company.

Answer 15

Acquisition

Question 16

happens when opportunities for growth depleted.

Answer 16

Diversification Strategies

Question 17

2 BASIC DIVERSIFICATION STRATEGIES

Answer 17

Concentric Diversification
Conglomerate “”

Question 18

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

Answer 18

Concentric Diversification

Question 19

diversifying to an industry unrelated to its current one.

Answer 19

Conglomerate Diversification

Question 20

continuing its current activities without any significant change in direction.

Answer 20

Stability Strategies

Question 21

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

Answer 21

Pause/ proceed with caution strategy

Question 22

It is a decision to do nothing new.

Answer 22

No-change Strategy

Question 23

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

Answer 23

Profit Strategy

Question 24

strategic decision of a company to downsize its operations, reduce costs, and focus on its core competencies to improve its overall performance.

Answer 24

Retrenchment Strategies

Question 25

4 retrenchment strategy

Answer 25

- Turn Around Strategy - Captive Company Strategy - Sell out/Divestment Strategy - Bankruptcy/Liquidation Strategy

Question 26

improvement of operational efficiency

Answer 26

Turn Around Strategy

Question 27

Giving up independence

Answer 27

Captive Company Strategy

Question 28

Sell off a division with low growth potential

Answer 28

Sell Out/ Divestment Strategy

Question 29

is one of the areas of investment management that enable market participants to analyze and assess the performance of a portfolio intending to measure performance on a relative and absolute basis along with its associated risks.

Answer 29

Portfolio Analysis

Question 30

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

Answer 30

Bankruptcy/ Liquidation Strategy

Question 31

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

Answer 31

PORTFOLIO ANALYSIS

Question 32

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.

Answer 32

Corporate Parenting

Question 33

Business Strategies; 2 Generic Competitive Strategies by Michael Porters

Answer 33

Lower Cost Strategy Differentiation Strategy

Question 34

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

Answer 34

Lower Cost Strategy

Question 35

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

Answer 35

Differentiation Strategy

Question 36

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.

Answer 36

Tactics

Question 37

TACTICS USED TO IMPLEMENT COMPETITIVE STRATEGIES

Answer 37

1. Timing Tactic 2. Market Location Tactic

Question 38

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

Answer 38

Timing Tactic

Question 39

deals with where a company implements a strategy.

Answer 39

Market Location Tactics

Question 40

METHODS USED TO ATTACK COMPETITOR’S POSITION

Answer 40

1. Frontal Assault 2. Flacking Maneuver 3. Bypass Attack 4. Encirclement 5. Guerilla Warfare

Question 41

the attacking firm goes head to head with its competitor.

Answer 41

Frontal Assault

Question 42

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

Answer 42

Flacking Maneuver

Question 43

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.

Answer 43

Bypass Attack

Question 44

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

Answer 44

Encirclement

Question 45

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

Answer 45

Guerilla Warfare

Question 46

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

Answer 46

Strategic Alliances