Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
11 Cards in this Set
- Front
- Back
|
What is corporate-level strategy? |
This is the strategy that focuses on gaining long-term revenue, profits, and market value through managing operations in multiple businesses. It’s about obtaining a sustainable competitive advantage for the company as a whole. |
|
|
What issues does a corporate-level strategy address? |
It addresses the issues of what businesses the company should compete in and how should the businesses be managed to jointly create more value than if they were freestanding units. |
|
|
How can managers create value for their firms through related diversification? |
Managers create values through synergies. Value is created through economies of scope (leveraging core competencies or sharing activities) revenue enhancement and pooled negotiating power. |
|
|
How can managers create value for their firms through unrelated diversification? |
Managers create values through synergies. Value is created through financial synergies and parenting. Also, they can add value by viewing the entire corporation as a portfolio. |
|
|
What are some of the various means that firms can use to diversify? |
- Mergers and Acquisitions - Strategic alliance and joint venture - Internal Development |
|
|
What are the pros and cons mergers and acquisitions? |
- (growth and speed, expand product offering, provide three bases of synergy, enter new markets, lead to consolidation within industry forcing others to merge) - (failure of integration, high takeover premium, imitate advantages realized, managers ego and credibility can get in the way) |
|
|
What are the pros and cons strategic alliance and joint ventures? |
- Enter new markets, reduce cost in value chain, developing and diffusing new tech - Bad partner, not a win-win situation, trust and compatible issues |
|
|
What are the pros and cons Internal development? |
- Don’t have to share any wealth, develop new products at low cost - Time consuming, need capabilities to allow them to move quickly into market |
|
|
How can companies benefit from related diversification? Unrelated diversification? |
? |
|
|
What are some of the ways that a firm can restructure its business? |
Asset restructuring, capital restructuring (change the debt-equity mix), and management restructuring |
|
|
Given the evidence that shareholders of many acquiring firms gain little or nothing from acquisitions, why do so many firms follow an acquisition strategy? |
To gain a competitive advantage for the entire company. The shareholders have potential for larger gains than if the firms did not attempt an acquisition. |
