Strategy Formulation: Functional Strategy and Strategic Choice Flashcards
An approach taken by a functional area to achieve corporate and
business unit objectives and strategies by
maximizing resource productivity
Functional Strategy
A functional strategy that
deals with pricing, selling, and distributing a
product.
Marketing Strategy
A marketing
strategy in which a company or unit develops
new products for existing markets or develops
new products for new markets.
Product Development Strategy
A successful brand name to
market other products and it is a good way to
appeal to a company’s current customers.
Brand Extension
A marketing strategy in which a
company charges a high price while a product is
novel and competitors are few.
Skim pricing
: A marketing strategy in which
advertising pulls the products through the
distribution channels.
Pull strategy
A marketing strategy in which a
large amount of money is spent on trade
promotion in order to gain or hold shelf space in
retail outlets.
Push strategy
A marketing pricing
strategy to obtain dominant market share by
using low price.
Penetration pricing
A marketing practice in
which different customers pay different prices
for the same product or service.
Dynamic pricing
A functional strategy to
make the best use of corporate monetary assets.
Financial Strategy
A corporate growth
strategy that expands product lines by moving
into another industry.
Diversification Strategy
An acquisition in which a
company is acquired in a transaction financed
largely by debt—usually obtained from a third
party, such as an insurance company or an
investment banker.
Leveraged buy-out
A stock split in which an
investor’s shares are reduced for the same total
amount of money.
Reverse stock split
A functional strategy that deals
with product and process innovation.
R&D strategy
: A company that pioneers
an innovation.
Technological leader:
It also deals with the appropriate mix of different
types of R&D:
Basic,
Product, or
Process
A company that
imitates the products of competitors
Technological follower