Chapter 7: Strategy Formulation: Corporate Strategy

Front 1

corporate strategy

Back 1

the choice of direction of the firm as a whole and the management of its business or product portfolio and concerns

Front 2

directional strategy

Back 2

the firm's overall strategy toward growth, stability, or retrenchment

Front 3

growth strategy

Back 3

the two basic growth strategies are concentration on the current product lines in one industry and diversification into other product lines in other industries

Front 4

merger

Back 4

transaction involving two or more corporations in which stock is exchanged but in which only one corporation survives

Front 5

acquisition

Back 5

the purchase of a company that s completely absorbed as an operating subsidiary or division of the acquiring corporation

Front 6

corporate strategy

Back 6

the choice of direction of the firm as a whole and the management of its business or product portfolio and concerns

Front 7

directional strategy

Back 7

the firm's overall strategy toward growth, stability, or retrenchment

Front 8

growth strategy

Back 8

the two basic growth strategies are concentration on the current product lines in one industry and diversification into other product lines in other industries

Front 9

merger

Back 9

transaction involving two or more corporations in which stock is exchanged but in which only one corporation survives

Front 10

acquisition

Back 10

the purchase of a company that s completely absorbed as an operating subsidiary or division of the acquiring corporation

Front 11

vertical growth

Back 11

taking ver the function previously provided by a supplier or by a distributor

Front 12

vertical integration

Back 12

the degree to which a firm operates vertically in multiple locations on an industry's value chain from extracting raw materials to manufacturing to retailing

Front 13

backward integration

Back 13

assuming a function previously provided by a supplier

Front 14

forward integration

Back 14

assuming a function previously provided by a distributor

Front 15

transaction cost economies

Back 15

proposes that vertical integration is more efficient than contracting for goods and services in the marketplace when the (external) transaction costs of buying on the open market become too great.
-if the costs of managing the internal transactions may become greater than simply purchasing the needed goods externally, then outsourcing could be more efficient than vertical integration

Front 16

full integration

Back 16

a firm internally makes 100% of its key supplies and completely controls its distributors

Front 17

taper integration

Back 17

a firm internally produces less than half of its own requirements and buys the rest from outside suppliers

Front 18

quasi integration

Back 18

a company does not make any of its key supplies but purchases most of its requirements from outside suppliers that are under its partial control

Front 19

long term integration

Back 19

agreements between 2 firms to provide agreed upon goods and services to each other for a specific period of time

Front 20

horizontal growth

Back 20

expansion of operations into other geographic locations and/or increasing the range of products and services offered to current market

Front 21

horizontal integration

Back 21

degree to which a firm operates in multiple geographic locations at the same point on an industry's value chain

Front 22

exporting

Back 22

shipping goods produced in the company's home country to other countries for marketing

Front 23

licensing

Back 23

firm grants rights to another firm in the host country to produce and or sell a product

Front 24

franchising

Back 24

franchiser grants rights to another company to open a retail store using the franchisers name and operating system

Front 25

acquisitions

Back 25

purchasing another company already operating in that area

Front 26

green-field development

Back 26

build own manufacturing plant and distribution system

Front 27

production sharing

Back 27

process of combining the higher labor skills and technology available in developed countries with the lower-cost labor available in developing countries

Front 28

concentric diversification

Back 28

-growth into a related industry when a firm has a strong competitive position but attractiveness is low

Front 29

synergy

Back 29

the concept that two businesses will generate more profits together than they could separately

Front 30

conglomerate diversification

Back 30

-management realizes that the current industry is unattractive and the firms lacks outstanding abilities or skills that it could easily transfer to related products or services in other industries

Front 31

portfolio matrix

Back 31

management views its product lines and business units as a series of investments from which it expects a profitable return

Front 32

BCG matrix

Back 32

portrays a corporation's portfolio of investments

Front 33

question mark

Back 33

new product with the potential for success require a lot of cash for development

Front 34

stars

Back 34

market leaders at the peak of their product cycle and are able to generate enough cash to maintain their high market share and usually contribute to the company's profits

Front 35

cash cows

Back 35

products that bring in far more money than is needed to maintain their market share

Front 36

dogs

Back 36

products with low market share and do not have the potential to bring in much cash