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
And with the question of how new technology
should be accessed—through:
Internal development,
External acquisition, or
Strategic alliances
A new approach to R&D in
which a firm uses alliances and connections with
corporate, government, and academic labs to
learn about new developments.
Open innovation
A functional strategy that
determines how and where a product or service
is to be manufactured, the level of vertical
integration in the production process, and the
deployment of physical resources.
Operations strategy
One-of-a-kind production using
skilled labor.
Job shop
A part of a
corporation’s manufacturing strategy in which
components are standardized and each machine
functions like a job shop but is positioned in the
same order as the parts are processed.
Connected line batch flow
A type of
manufacturing that permits the low-volume
output of custom-tailored products at relatively
low unit costs through economies of scope.
Flexible manufacturing
A highly automated
assembly line making one mass-produced
product using little human labor.
Dedicated transfer line
A system in which
employees work on narrowly defined, repetitive
tasks under close supervision in a bureaucratic
and hierarchical structure to produce a large
amount of low-cost, standard goods and
services.
Mass production
A system developed
by Japanese firms in which teams strive
constantly to improve manufacturing processes
Continuous improvement
A system in which
preassembled subassemblies are delivered as
they are needed to a company’s assembly-line
workers who quickly piece the modules together
into finished products
Modular manufacturing
The low-cost production
of individually customized goods and services.
Mass customization
The Basic Purchasing Choices: A purchasing strategy in
which a company orders a particular part from
several vendors.
Multiple sourcing
The use of
business practices to reduce a company’s impact
upon the natural, physical environment.
Environmental sustainability
A functional strategy that
deals with obtaining the raw materials, parts, and supplies needed to perform the operations
functions.
Purchasing strategy
The Basic Purchasing Choices:
Multiple sourcing: A purchasing strategy in
which a company orders a particular part from
several vendors.
Sole sourcing: Relying on only one supplier for
a particular part.
Parallel sourcing: A process in which two
suppliers are the sole suppliers of two different
parts, but they are also backup suppliers for each
other’s parts.
Just-In-Time: A purchasing concept in which
parts arrive at the plant just when they are
needed rather than being kept in inventories.
The Basic Purchasing Choices: Relying on only one supplier for
a particular part.
Sole sourcing
The Basic Purchasing Choices: A process in which two
suppliers are the sole suppliers of two different
parts, but they are also backup suppliers for each
other’s parts.
Parallel sourcing
The Basic Purchasing Choices:
: A purchasing concept in which
parts arrive at the plant just when they are
needed rather than being kept in inventories.
Just-In-Time
A functional strategy that
deals with the flow of products into and out of
the manufacturing process.
Logistics strategy
(HRM)
Human resource management (HRM)
strategy
A functional strategy that makes the
best use of corporate human assets.
Human resource management (HRM)
strategy
A group of people who work together without a supervisor to plan, coordinate, and evaluate their
own work
Autonomous (self-managing) work teams
An evaluation technique in which input is gathered
from multiple sources.
360-degree performance appraisal
Diverse Workforce:
Information technology strategy
Follow-the-sun-management
A functional
strategy that uses information systems
technology to provide a competitive advantage.
Information technology strategy
A management
technique in which modern communication
enables project team members living in one
country to pass their work to team members in
another time zone so that the project is
continually being advanced
Follow-the-sun-management
