capstone

Buyers

(x) purchase the goods and services that the firms in an industry produce.

SMOKES LLC joins with Darth Vapor, one of its direct competitors.

A fellow ASI analysts is having a problem understanding the concept of horizontal integration and has asked you to explain it to him. You think for a moment and then reply with one of the scenarios below as an example:

An entrepreneur who transformed invention into an innovation.

After Jeff Bezos read about how the Internet was growing by 2,000 percent a month, he set out to use the Internet as a new distribution channel and created Amazon, which is now the world's largest online retailer. This is clearly an example of:

Incremental

After an innovator launches a radical innovation, it must follow-up with ___________ innovations in order to protect its original advantage(s) and pre-empt potential rivals.

Poison Pill

Also known as a Shareholder rights plan

The intent of an integration strategy is not to be the absolute lowest-cost provider because of the added costs of increased value in its products/service.

An integration strategy differs from a low-cost strategy in that:

Diseconomies of scale

Big Bill has been bragging to you about how big his manufacturing plant is. He confidently tells you that he's going to expand to an even bigger plant by the end of the year. He said that he learned about the concept of "economies of scale" from the University of South Florida's College of Business and knows how important that can be as a cost driver for his cost leadership strategy. You, being trained at ASI (UCF's College of Business) have discovered that Big Bill's business will be unable to meet the minimum efficiency scale and with the new bigger plant, will undoubtedly exceed it. You try to warn him that "sometimes bigger is not always better" because at some point costs increase as output increases. This is referred to as:

Buy Us is "stuck in the middle" and has a competitive disadvantage.

Buy Us is a big box retailer who is in direct competition with Walmart and Target. Buy Us initially tried to respond to Walmart by cutting its prices and reducing costs. Walmart has greater buying power and a more efficient supply chain, therefore Buy Us was not able to compete on costs. The company then tried to differentiate itself by signing a celebrity to create an in-house line of clothing. However, Target has a celebrity clothing line that has a more differentiated appeal. The economic value created by Buy Us is currently less than Target and Walmart. It can be said that:

where to compete forward vertical integration backward vertical integration

Corporate level strategy

Multidivisional Structure

Each SBU functions relatively autonomously because it contains most of the functional expertise (production, marketing, accounting, finance, human resources) needed to meet its profit/loss objectives on their own.

Matrix Structure

Employees from various functional areas (product design, manufacturing, finance, marketing, human resources, etc.) form teams to combine their skills in working on a specific project or product. Usually they report to more than one boss.

Rivalry among competitors

High levels of WHAT tend to reduce the profit potential of an industry.

Harvest

IBM still offers typewriters even though it does not invest much in future innovations of its typewriter line. Instead, it has chosen a _________ strategy to maximize cash flow from the remaining demand for typewriters.

competitors can raise their prices and enjoy greater profits.

If buyers have less leverage over the competitors than the competitors have over the buyers, then

Higher, Lower

Industries with (x) barriers to entry are in a safer defensive position that industries with (x) barriers.

Introduction stage growth stage maturity stage decline stage

Industry Lifestyle stages

Mastery (how to do it) Autonomy (about what to do) Purpose (Why to do it)

Intrinsic motivation is highest when an employee has:

Mechanistic

Obey and Follow Inc. is characterized by a high degree of specialization and formalization, and has a tall hierarchy that relies on centralized decision making. Obey and Follow Inc. would be best classified as a _____________ organization.

Specialization

Organizing activities into clusters of related tasks that can be handled by certain individuals or groups is called

Related-constrained and related-linked strategies are associated with higher firm performance.

Research indicates that when it comes to the diversification-performance relationship:

Joint Ventures Long term contracts Equity alliances Parent Subsidiary

Strategic Alliances

Formalization

The extent to which employee behavior is guided by rules and procedures is most connected to:

Hierarchy

The formal, position-based reporting lines is known as the

Threat of New Entrants

The great wall of china protects china against potential raiders for centuries, this is an example of

Early adopters

The type of customers vital to a firm introducing a new innovation are the _________, who are willing to pay higher prices and like to tinker with new products.

Functional Structure

This structure groups people together who have comparable skills and perform similar tasks

Hostile Takeover

To do a (blank) a firm must be publicly traded.

Simple Structure

Used by small firms with low organizational complexity

Partner selection and alliance formation alliance design and governance post formation alliance management

What are alliance governance mechanisms

Target and Walmart

What are some examples of buyers for Procter and Gamble?

Exit Harvest Maintain Consolidate

What are the 4 strategic options to pursue when in the Decline phase?

Strengthen competitive position Enter new markets Hedge against uncertainty Access critical complementary resources Learn new capabilities

What are the 5 common reasons why firms enter into strategic alliances?

Gain complementary Products Attain new markets or distribution channels Realize synergies or core competencies

What are the motives behind mergers and acquisitions?

Strategic Alliances

What is a voluntary arrangement between firms?

Corporate level strategy answers WHERE we are going to compete and business level strategy answers HOW we are going to compete.

What is the difference between corporate level strategy and business level strategy?

Merger

What is the joining of two independent companies that forms a combined entity

Horizontal Integration

What is the process of merging with competitors then leading to industry consolidation?

Acuisition

What is the purchase of one company by another and it can be hostile?

Porters Five Forces

What is the tool that tells you if an industry is attractive to enter?

Organizational structure must follow strategy in order for firms to achieve superior performance.

What is true of strategy in an organization?

Suppliers

What provide inputs that the firms in an industry need to create the goods and services that they in turn sell to their buyers.

New Entrants

What tends to reduce the profit potential of an industry by increasing its competitiveness.

Forward vertical integration

What type of integration involves moving ownership of activities closer to the end customer (not always the buyer)

Backward vertical integration

What type of integration uses buying a supplier?

Vertical integration

When a firm buys a buyer or supplier

Only a few exceptional firms are able to balance the value-cost strategic trade-offs and adopt an integration strategy successfully.

When it comes to strategic positioning and generic business strategies, which of the following is TRUE:

Centralization

When most of the decision making is concentrated at the top

A merger tends to be friendly; an acquisition can be friendly or unfriendly.

Which of the following accurately describes a common difference between a merger and an acquisition?

McDonald's use of standard operating procedures across the world

Which of the following real-world scenarios best exemplifies formalization?

Input controls

________ define and direct employee behavior through explicit and codified rules and standard operating procedures.

Output controls

_______guide employee behavior by defining expected results, but leave the means to those results open to individual employees, groups, or SBUs.

Backward vertical integration

buyers possess power to the extent that they have the ability to become a new entrant to the industry if they wish. This strategy is called

unrelated diversification related diversification single business dominant business related constrained related linked

corporate diversification

Incremental

innovation builds on an established knowledge base and usually results from steady improvement

Radical

innovation draws on novel methods & materials; targets new markets with new technology.

Architectural

innovation leverages existing technology into new markets

Disruptive

innovation leverages new technologies in existing markets.

Stratgey

is defined as the goal directed actions a firm takes to gain and sustain a competitive advantage.

Competitive advantage

occurs when a firm generates above average returns relative to competition.

architectural disruptive radical incremental

types of innovation