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39 Cards in this Set

  • Front
  • Back

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


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


Firms in the ______ strategic groups use ___ strategy

same, similar

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

high, above average

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

External, Internal

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

resources, capabilities


Resource based View

Are resouces and capabilites highly mobile across firms!?


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

resources and capabilities

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


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

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

(1) Overall cost leadership

(2) Differentiation

(3) Focus

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

cost drivers

____ = Decreased average & marginal cost as increase inproduction volume

Economies of Scale

____ = Cost efficiency from joint productions / activities

Economies of (Scope)

______ = “Experience Curve (Learning curve)”

Economies of Experience

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

Differentiationd advantage

_____ = 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.

(Transactions Costs)

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

Firm Boundary

_____ = when a firm expands into a similar field ofoperation

Related diversification:

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

Unrelated diversification:

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


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


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.

(1) Attractiveness

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

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


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


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


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


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


Anti-takeover provisions


(___) : executive compensation package

(_____) : stock repurchase program

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

Golden Parachutes

Poison Pill

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

high & slow

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

quickest, easiest

_____ = The process of evaluating a target firm for acquisition

(Due Diligence)

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

Diseconomies of scale

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

Joint Ventrue

(_____) : building or acquiringproductive assets in another country

FDI : Foreign Direct Investment

Theory of _____ Explains why countries engage in international trade

Comparative Advantage

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

(Greenfield Venture)