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Strategy > Test 2 > Flashcards

Test 2 Flashcards

0
Q

the boundaries of the firm along three dimensions: industry value chain, products and services, and geography

A

Scope of the Firm

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1
Q

the decisions that senior management makes and the actions it takes in the quest for competitive advantage in several industries and markets simultaneously; addresses where to compete

A

Corporate level strategy

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2
Q

situation in which the stock price of related-diversification firms is valued at greater than the sum of their individual business units.

A

Diversification premium

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3
Q

situation in which the stock price of highly diversified firms is valued at less than the sum of their individual business units

A

Diversification discount

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4
Q

corporate strategy in which a firm derives less than 70% of its revenues from a single business activity and there are few, if any, linkages among its businesses

A

Unrelated diversification strategy

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5
Q

Corporate strategy in which a firm derives less than 70% of its revenues from a single business activity but obtains revenues from other lines of business that are linked to the primary business activity.

A

Related diversification strategy

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6
Q

corporate strategy in which a firm is active in several different product markets and several different countries

A

Product-market diversification strategy

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7
Q

corporate strategy in which a firm is active in several different countries

A

Geographic diversification strategy

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8
Q

corporate strategy in which a firm is active in several different product markets

A

Product diversification strategy

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9
Q

an increase in the variety of products or markets in which to compete

A

Diversification

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10
Q

moving one or more internal value chain activities outside the firm’s boundaries to other firms in the industry value chain.

A

Strategic outsourcing

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11
Q

a way of orchestrating value activities in which a firm is backwardly integrated but also relies on outside market firms for some of its supplies, and or is forwardly integrated but also relies on outside market firms for some of its distribution

A

Taper integration

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12
Q

assets that have significantly more value in their intended use than in their next best use; they come in three types: site specificity, physical asset specificity, and human asset specificity.

A

Specialized assets

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13
Q

changes in an industry value chain that involve moving ownership of activities closer to the end point of the value chain

A

Forward vertical integration

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14
Q

changes in an industry value chain that involve moving ownership of activities upstream to the originating point of the value chain

A

Backward vertical integration

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15
Q

depiction of the transformation of raw materials into finished goods and services along distinct vertical stages, each of which typically represents a distinct industry in which a number of different firms are competing

A

Industry value chain

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16
Q

the firm’s ownership of its production of needed inputs or of the channels by which it distributes its outputs

A

Vertical integration

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17
Q

a theoretical framework in strategic management to explain and predict the scope of the firm, which is central to formulating a corporate level strategy that is more likely to lead to competitive advantage.

A

Transaction cost economics

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18
Q

organizational form in which two or more partners create and jointly own a new organization

A

Joint venture

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19
Q

a long term strategic decision that is both difficult and costly to reverse

A

Credible commitment

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20
Q

a long term contract in which a franchisor grants a franchisee the right to use the franchisor’s trademark and business processes to offer goods and services that carry the franchisor’s brand name; the franchisee in turn pays an up front buy in lump sum and a percentage of revenues

A

Franchising

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21
Q

a form of long term contracting in the manufacturing sector that enables firms to commercialize intellectual property

A

Licensing

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22
Q

situations in which one party is more informed than another, mostly due to the possession of private information

A

Information asymmetries

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23
Q

situation in which an agent performing activities on behalf of a principal pursues his or her own interests

A

Principal-agent problem

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24
Q

all costs associated with an economic exchange, whether within a firm or in markets

A

Transaction costs

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25
Q

all costs pertaining to organizing an economic exchange within a hierarchy, including recruiting and retaining employees, paying salaries and benefits, and setting up a business.

A

Administrative costs

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26
Q

a corporate planning tool in which the corporation is viewed as a portfolio of business units, which are represented graphically along relative market share and speed of market growth. SBU’s are plotted into four categories, each of which warrants a different investment strategy

A

Boston Consulting Group growth share matrix

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27
Q

the joining of two independent companies to form a combined entity.

A

Merger

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28
Q

the purchase or takeover of one company by another; can be friendly or hostile

A

Acquisition

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29
Q

situation in which a network exhibits local clusters, each with high degree centrality.

A

Small world phenomenon

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30
Q

spaces where two organizations are connected to the same organization, but are not connected to one another.

A

Structural holes

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31
Q

the number of direct ties a firm has in a network, out of possible direct ties; the more direct ties, the more centrally located the firm is

A

Degree centrality

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32
Q

a social structure composed of multiple organizations and the links among the nodes

A

Strategic network

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33
Q

a firm’s ability to effectively manage

A

Alliance management capability

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34
Q

a standalone organization created and jointly owned by two or more parent companies

A

Joint venture

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35
Q

equity investments from established firms in entrepreneurial ventures; falls under the broader rubric of equity alliances.

A

Corporate venture capital

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36
Q

knowledge that cannot be codified; concerns knowing how to do a certain task and can be acquired only through active participation in that task

A

Tacit knowledge

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37
Q

partnership in which at least one partner takes partial ownership in the other partner

A

Equity alliance

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38
Q

knowledge that can be codified; concerns knowing about a process or product.

A

Explicit knowledge

39
Q

acquisition in which the target company does not wish to be acquired

A

Hostile takeover

40
Q

partnership based on contracts between firms. The most frequent forms are supply agreements, distribution agreements, and licensing agreements

A

Non-equity alliance

41
Q

situations in which both partners in a strategic alliance are motivated to form an alliance for learning, but the rate at which the firms learn may vary; the firm that accomplishes its goal more quickly as an incentive to exit the alliance or reduce its knowledge sharing

A

Learning races

42
Q

strategic management framework that proposes that critical resources and capabilities frequently are embedded in strategic alliances that span firm boundaries.

A

Relational view of competitive advantage

43
Q

a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to led to competitive advantage

A

Strategic alliance

44
Q

a form of self-delusion, in which managers convince themselves of their superior skills in the face of clear evidence to the contrary.

A

Managerial hubris

45
Q

the process of acquiring and merging with competitors, leading to industry consolidation.

A

Horizontal integration

46
Q

process of closer integration and exchange between different countries and people worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs.

A

Globalization

47
Q

a type of positive externality that is regionally constrained.

A

Knowledge spillover

48
Q

a group of interconnected companies and institutions in a specific industry, located near each other geographically and also linked by common characteristics

A

Regional clusters

49
Q

world leadership in specific industries

A

National competitive advantage

50
Q

assumption that geographic location alone should not lead to firm level competitive advantage because firms are now, more than ever, able to source inputs globally.

A

Death-of-distance hypothesis

51
Q

strategy that attempts to combine the benefits of a localization strategy with those of a global standardization strategy

A

Transnational strategy

52
Q

strategy attempting to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best of class capabilities reside at the lowest cost.

A

Global-standardization strategy

53
Q

strategy pursued by MNE’s that attempts to max local responsiveness, with the intent that local consumers will perceive them to be domestic companies; strategy arises out of the combination of high pressure for local responsiveness and low pressure for cost reductions; also called a multi domestic strategy

A

Localization strategy

54
Q

strategy that involves leveraging home based core competencies by selling the same products or services in both domestic and foreign markets; advantageous when the MNE faces low pressures for both local responsiveness and cost reductions

A

International strategy

55
Q

a company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries.

A

Multinational enterprise

56
Q

strategy framework that juxtaposes the pressures an MNE faces for cost reductions and local responsiveness to gain and sustain competitive advantage when competing globally: international strategy, localization strategy, global-standardization strategy, and transnational strategy

A

Integration-responsiveness framework

57
Q

the need to tailor product and service offerings to fit local consumer preferences and host country requirements; generally entails higher cost

A

Local responsiveness

58
Q

assumption that consumer needs and preferences throughout the world are converging and this becoming increasingly homogenous

A

Globalization hypothesis

59
Q

cultural disparity between an internationally expanding firm’s home country and its targeted host country.

A

Cultural distance

60
Q

dimension of culture that focuses on societal differences in tolerance toward ambiguity and uncertainty

A

Uncertainty-voidance dimension

61
Q

dimension of culture that focuses on the relationship between genders and its relation to an individual’s role at work and in society.

A

Masculinity-femininity dimension

62
Q

dimension of culture that focuses on the relationship between individuals in a society, particularly the relationship between individual and collective pursuits

A

Individualism dimension

63
Q

dimension of culture that focuses on how a society deals with inequality among people in terms of physical and intellectual capabilities, and how those methods translate into power distributions within organizations

A

Power distance dimension

64
Q

the collective mental and emotional programming of the mind that differentiates human groups

A

National culture

65
Q

additional costs of doing business in an unfamiliar cultural and economic environment, and of coordinating across geographic distances

A

Liability of foreignness

66
Q

benefits from locating value chain activities in the worlds optimal geographies for a specific activity, wherever that may be

A

Location economies

67
Q

a firm’s investment in value chain activities abroad

A

Foreign direct investment

68
Q

a firm’s strategy to gain and sustain competitive advantage when competing against other foreign and domestic companies around the world.

A

Global strategy

69
Q

Seeks to reap economies of scale and location by pursuing a global division of labor based on wherever best of class capabilities reside at the lowest cost. It involves little or no local responsiveness

A

global standardization strategy

70
Q

attempts to combine the high local responsiveness of a localization strategy with the lowest cost position attainable from a global standardization strategy. It also aims to benefit from global learning. Although appealing, it is difficult to implement due to the organizational complexities

A

transnational strategy

71
Q

seeks to reap economies of scale and location by pursuing a global division of labor based on wherever best of class capabilities reside at the lowest cost. It involves little or no local responsiveness

A

global standardization strategy

72
Q

attempts to max local responsiveness in the face of law pressure for cost reductions. It is costly and inefficient because it requires the duplication of key business functions in multiple countries

A

localization strategy

73
Q

leverages home based CC’s into foreign markets, primarily through exports. It is useful when the MNE faces low pressures for both local responsiveness and cost reductions

A

international strategy

74
Q

deploys resources and capabilities to procure, produce, and distribute goods and services in at least two countries

A

multinational enterprise (MNE)

75
Q

a firms investments in value chain activities abroad

A

Foreign direct investment

76
Q

involves closer integration and exchange between different countries and people worldwide, made possible by factors such as falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs

A

Globalization

77
Q

Connects different network clusters. The broker often spans structural holes, which strengthens its position, especially in a small world network.

A

Network broker firm

78
Q

an alliance of several firms to pursue a common purpose. A social structure of multiple organizations and the links among the nodes.

A

Strategic network

79
Q

have the goal of sharing knowledge, resources, and capabilities in order to develop processes, products, or services.

A

Strategic alliances

80
Q

the process of acquiring and merging with competitors, leading to industry consolidation.

A

Horizontal integration

81
Q

helps managers decide what activities to do in house versus what services and products to obtain from the external market

A

Transaction cost economics

82
Q

less than 70% of a firm’s revenues come from a single business, and there are few, if any, linkages among its businesses

A

unrelated diversification strategy

83
Q

less than 70% of a firm’s revenues from a single business activity, but obtains revenues from other lines of business that are linked to the primary business activity

A

related diversification strategy

84
Q

derives between 70-95% of its revenue from a single business

A

dominant business firm

85
Q

a firm’s boundaries are delineated by its knowledge bases and competencies

A

resource based view of the firm

86
Q

derives 95% or more of its revenues from one business

A

single business firm

87
Q

involves moving one or more value chain activities outside the firm’s boundaries to other firms in the industry value chain.

A

Strategic outsourcing

88
Q

a strategy in which a firm is backwardly integrated but also relies on outside market firms for some of its supplies, and or is forwardly integrated but also relies on market firms for some of its distribution

A

Taper integration

89
Q

contributes to competitive advantage if the incremental value created is greater than the incremental cost of the specific corporate level strategy.

A

Vertical integration

90
Q

involves moving ownership of activities closer to the end point of the value chain

A

Forward vertical integration

91
Q

denotes a firm’s value added - what percentage of a firm’s sales is generated by the firm within its boundaries.

A

Vertical integration

92
Q

involves moving ownership of activities upstream nearer to the originating point of the industry value chain

A

Backward vertical integration

93
Q

depicts the transformation of raw materials into finished goods and services. Each stage typically represents a distinct industry in which a number of different firms are competing

A

Industry value chain

94
Q

outsourcing of activities outside the home country

A

Off shoring

Strategy (3 decks)

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