Chapter 7 – Strategic Management ; Business Policy – 14th Ed. – Flashcards
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Captive Company strategy
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Dedicating a firm's productive capacity as a primary supplier to another company in exchange for a long-term contract
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Cash Cow - BCG matrix
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A product that brings in far more money than is needed to maintain its market share
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Center of Excellence
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A designated area in which a company has a core or distinctive competence
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Concentration
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A corporate growth strategy that concentrates a corporation's resources on competing in one industry.
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Concentric Diversification
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A diversification growth strategy in which a firm uses its current strengths to diversify into related products in another industry
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Conglomerate diversification
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A diversification growth strategy that involves a move into another industry to provide products unrelated to its current products
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Corporate Parenting
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A corporate strategy that evaluates the corporation's business units in terms of resources and capabilities that can be used to build business unit value as well as generate synergies across business units.
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Corporate strategy
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A strategy that states a company's overall direction in terms of its general attitude toward growth and management of its various business and product lines
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Directional strategy
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A plan composed of three general orientations - growth strategy, stability strategy, retrenchment strategy
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Diversification
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A corprorate growth strategy that expands product lines by moving into another industry
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Divestment
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A retrenchment strategy in which a division of a corporation with low growth potential is sold
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Dogs - BCG matrix
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A business that does not seem to provide any remaining opportunities for growth
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Exporting
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Shipping goods produced in the company's home country to other countries for marketing
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Forward integration
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Assuming a function previously provided by a distributor
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Franchising
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An international entry strategy in which a firm grants rights to another company/indvidual to open a retail store using the franchiser's name and operating system
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Full integration
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Complete control of the entire value chain of the business.
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GE Business Screen
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One of the popular portfolio techniques
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Green-field Development
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An international entry option to build a company's manufacturing plant and distribution system in another country
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Growth Strategy
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A directional strategy that expands a company's current activities
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Horizontal Growth
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A corporate growth concentration strategy that involves expanding the firm's products into other geographic locations and/or increasing the range of products and services offered to current markets
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Horizontal Integration
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The degree to which a firm operates in multiple geographic locations at the same point on an industry's value chain
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horizontal strategy
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A corporate strategy that cuts across business unit boundaries to build synergy between business units and to improve the competitive position of one or more business units
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Joint ventures
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An independent business entity created by two or more companies in a strategic alliance
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Licensing
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An agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a branded product
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Liquidation
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The termination of a firm in which all its assets are sold
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Long term contracts
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Agreements between two separate firms to provide agreed-upon goods and services to each other for a specified period of time.
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Management Contracts
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Agreements through which a corporation can use some of its personnel to assist a firm in a host country for specified fee and period of time
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Merger
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A transaction in which two or more corporations exchange stock, but from which only one corporation survives
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Multipoint Competition
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A rivalry in which a large multi-business corporation competes against other large multi-business firms in a number of markets
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No-Change Strategy
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A decision to do nothing new - a choice to continue current operations and policies for the foreseeable future
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Parenting Strategy
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The manner in which management coordinates activities and transfers resources and cultivates capabilities among product lines and business units
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Pause/proceed with caution strategy
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A corporate strategy in which nothing new is attempted; an opportunity to rest before continuing a growth or retrenchment strategy
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Portfolio Analysis
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An approach to corporate strategy in which top management views its product lines and business units as a series of investments from which it expects a profitable return
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Production Sharing
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The process of combining the higher labor skills and technology available in developed countries with the lower-cost labor available in developing countries
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Profit Strategy
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A strategy that artificially supports profits by reducing investment and short-term discretionary expenditures
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Quasi-Integration
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A type of of vertical growth-integration in which 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
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Question marks - BCG matrix
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New products that have the potential for success and need a lot of cash for development
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Entrenchment Strategies
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Reduce the company's level of activities
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Sell-Out Strategy
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A retrenchment option used when a company has a weak competitive position resulting in poor performance
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Stability Strategy
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Corporate strategies to make no change to the company's current direction or activities
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Stars - BCG matrix
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Market leader that is able to generate enough cash to maintain its high market share
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Synergy
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A concept that states that the whole is greater than the sum of its parts; that two units will achieve more together than they could separately
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Taper Integration
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A type of vertical integration in which a firm internally produces less than half of its own requirements and buys the rest from outside suppliers
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Transaction Cost Economics
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Proposes that vertical integration is more efficient than contracting for goods and services in the marketplace when the transaction cost of buying goods on the open market becomes too great
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Turnaround Strategy
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A plan that emphasizes the improvement of operational efficiency when a corporation's problems are persuasive but not yet critical
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Turnkey Operations
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Contracts for the construction of operating facilities in exchange for a fee.
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Vertical Growth
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A corporate growth strategy in which a firm takes over a function previously provided by a supplier or a distributor
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Vertical Integration
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The degree to which a firm operates vertically in multiple locations on in industry's value chain from extracting raw materials to manufacturing to retailing
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