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
