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27 Cards in this Set
- Front
- Back
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corporate-level strategy |
a strategy that focuses on gaining long-term revenue, profits, and market value through managing operations in multiple businesses |
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diversification |
the process of firms expanding their operations by entering new businesses |
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related diversification |
a firm entering a different business in which it can benefit from leveraging core competencies, sharing activities, or building market power |
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economies of scope |
cost savings from leveraging core competencies or sharing related activities among businesses in a corporation |
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core competencies |
a firm's strategic resources that reflect the collective learning in the organization |
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sharing activities |
having activities of two or more businesses' value chains done by one of the businesses |
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market power |
firms' abilities to profit through restricting or controlling supply to a market or coordinating with other firms to reduce investment |
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pooled negotiating power |
the improvement in bargaining position relative to suppliers and customers |
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vertical integration |
an expansion or extension of the firm by integrating preceding or successive production processes |
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transaction cost perspective |
a perspective that the choice of a transaction's governance structure, such as vertical integration or market transaction, is influenced by transaction costs, including search, negotiating, contracting, monitoring, and enforcement costs, associated with each choice |
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unrelated diversification |
a form entering a different business that has little horizontal interaction with other businesses of a firm |
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parenting advantage |
the positive contributions of the corporate office to a new business as a result of expertise and support provided and not as a result of substantial changes in assets, capital structure, or management |
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restructuring |
the intervention of the corporate office in a new business that substantially changes the assets, capital structure, and/or management, including selling off parts of the business, changing the management, reducing payroll and unnecessary sources of expenses, changing strategies, and infusing the new business with new technologies, processes, and reward systems |
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portfolio management |
a method of (a) assessing the competitive position of a portfolio of businesses within a corporation, (b) suggesting strategic alternatives for each business, and (c) identifying priorities for the allocation of resources across the businesses |
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acquisitions |
the incorporation of one firm into another through purchase |
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mergers |
the combining of two or more firms into one new legal entity |
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divestment |
the exit of a business form a firm's portfolio |
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strategic alliance |
a cooperative relationship between two or more firms |
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joint ventures |
new entities formed within a strategic alliance in which two or more firms, the parents, contribute equity to form the new legal entity |
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internal development |
entering a new business through investment in new facilities, often called corporate entrepreneurship and new venture development |
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managerial motives |
managers acting in their own self-interest rather than to maximize long-term shareholder value |
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growth for growth's sake |
managers' actions to grow the size of their firms not to increase long-term profitability but to serve managerial self-interest |
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egotism |
managers' actions to shape their firms' strategies to serve their selfish interests rather than to maximize long-term shareholder value |
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antitakeover tactics |
managers' actions to avoid losing wealth or power as a result of a hostile takeover |
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greenmail |
a payment by a firm to a hostile party for the firm's stock at a premium, made when the firm's management feels that the hostile party is about to make a tender offer |
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golden parachute |
a prearranged contract with managers specifying that, in the event go a hostile takeover, the target firm's managers will be paid a significant severance package |
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poison pill |
used by a company to give shareholders certain rights in the event of takeover by another firm |
