Sigma 2

Front 1

I/O Industrial Organization Model Focuses on the environment that is ___ the firm

Back 1

outsides

Front 2

The Resource-Based Models focuses on the ___ of the firm

Back 2

inside

Front 3

Firms in the ______ strategic groups use ___ strategy

Back 3

same, similar

Front 4

How to achieve superior return?! Locate an industry with ___ potential for ______ return

Back 4

high, above average

Front 5

________ & _________ environments influence the company's ability to achieve strategic competitivenessand earn above-average returns.

Back 5

External, Internal

Front 6

The resource-based view assumes that each organization is a collection of unique ___ and _____

Back 6

resources, capabilities

Front 7

RBV!?

Back 7

Resource based View

Front 8

Are resouces and capabilites highly mobile across firms!?

Back 8

NO

Front 9

Differences in ____ and _____ are the basis of competitive advantages.

Back 9

resources and capabilities

Front 10

Competitive advantage is subject to erosion by competition, especially by ____

Back 10

imitation

Front 11

Business level strategies are intended to create ____ between the firms position relative to those of its rivals.

Front 12

Three Generic Strategies:
(1) Low cost position relative to firms peers

(2) Create products and/or services that are unique &valued

(3) Narrow product lines, buyer segments, or targetedgeographic markets

Back 12

(1) Overall cost leadership

(2) Differentiation

(3) Focus

Front 13

_____ = The Principal determinants of a firm’s unit costs (cost perunit of output) relative to its competitors

Back 13

cost drivers

Front 14

____ = Decreased average & marginal cost as increase inproduction volume

Back 14

Economies of Scale

Front 15

____ = Cost efficiency from joint productions / activities

Back 15

Economies of (Scope)

Front 16

______ = “Experience Curve (Learning curve)”

Back 16

Economies of Experience

Front 17

_____ = occurs when a firm is able to obtain from itsdifferentiation a price premium in the market thatexceeds the cost of providing the differentiation.

Back 17

Differentiationd advantage

Front 18

_____ = the costs of market transactions. When the costs ofadministering transactions within the firm are lowerthan the costs of market transactions, the firm grows insize and scope.

Back 18

(Transactions Costs)

Front 19

______: where “make” decision ends &“buy” decision is starts
*****

Back 19

Firm Boundary

Front 20

_____ = when a firm expands into a similar field ofoperation

Back 20

Related diversification:

Front 21

______ = when the additional product line is verydifferent from the firm’s core business (i.e. conglomeratediversification)

Back 21

Unrelated diversification:

Front 22

_____ diversification: involves the firm moving into the“same stage” of production

Back 22

(Horizontal)

Front 23

_____ diversification: when a firm undertakes “successivestages” in the production of a good or service

Back 23

(Vertical)

Front 24

Tests for deciding whether diversification willcreate shareholder value:The (_____) test: the industries chosen for diversification must be structurallyattractive or capable of being made attractive.The (_____) test: The cost of entry must not capitalize all the future profits.The (____) test: Either the new unit must gain competitive advantage from its linkwith the corporation, or vice versa.

Back 24

(1) Attractiveness

(2) Cost-Of-Entry
(3) Better-Off

Front 25

(____) integration: the firm acquires ownership andcontrol over the production of its own “inputs”.

Back 25

Backward

Front 26

(______) integration: the firm acquires ownership andcontrol of activities previously undertaken by its customers.

Back 26

Forward

Front 27

(_______) (i.e. international outsourcing)Relocation by a company of a business process from onecountry to another (e.g. call center in India)

Back 27

Offshoring

Front 28

_____- = Two firms agree to integrate their operations on arelatively co-equal basis

Back 28

Merger

Front 29

____ = One firm buys a controlling, 100 percent interest inanother firm with the intent of making the acquired firma subsidiary business within its portfolio

Back 29

Acquisition

Front 30

Anti-takeover provisions

Examples:

(___) : executive compensation package

(_____) : stock repurchase program

(_____) : to make the potential acquisition less desirableor hard to acquire by issuing rights such as

Back 30

Golden Parachutes
Greenmail

Poison Pill

Front 31

Internal development of new products is oftenperceived as “___-risk & ____” activity.

Back 31

high & slow

Front 32

Using M&A to diversify a firmis the ___and ____way to change its portfolio ofbusinesses.

Back 32

quickest, easiest

Front 33

_____ = The process of evaluating a target firm for acquisition

Back 33

(Due Diligence)

Front 34

_____ = Additional costs and complexity of management may exceed thebenefits of the economies of scale and additional market power

Back 34

Diseconomies of scale

Front 35

____ = Two or more firms create a legally independent companyby sharing some of their resources and capabilities.

Back 35

Joint Ventrue

Front 36

(_____) : building or acquiringproductive assets in another country

Back 36

FDI : Foreign Direct Investment

Front 37

Theory of _____ Explains why countries engage in international trade

Back 37

Comparative Advantage

Front 38

(______Venture)a firm invests directly in another country/market byestablishing a new wholly owned subsidiary (i.e.internal development)

Back 38

(Greenfield Venture)

Front 39

GG

Back 39

GG