You are on page 1of 4

_____________ is primarily about the choice of direction for a firm as a whole and the management

of its business or product portfolio.3

_____________ is a transaction involving two or more corporations in which stock is exchanged but in which only one corporation
_____________ is the purchase of a company that is completely absorbed as an operating subsidiary or division of the acquiring
Hostile acquisitions are often called _____________
_____________ can be achieved by taking over a function previously provided by a supplier or by a distributor.
_____________ the degree to which a firm operates vertically in multiple locations on an industrys value chain from extracting raw
materials to manufacturing to retailing
Assuming a function previously provided by a supplier is called _____________
Assuming a function previously provided by a distributor is labeled _____________
_____________ proposes that vertical integration is more efficient than contracting for goods and services in the marketplace when
the transaction costs of buying goods on the open market become too great.
_____________ a firm internally makes 100% of its key supplies and completely controls its distributors.
_____________ (also called concurrent sourcing), a firm internally produces less than half of its own requirements and buys the rest
from outside suppliers (backward taper integration)
_____________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 (backward quasi-integration)
_____________ are agreements between two firms to provide agreed-upon goods and services to each other for a specified period of
_____________ shipping goods produced in the companys home country to other countries for marketing.
_____________ the licensing firm grants rights to another firm in the host country to produce and/or sell a product.
_____________ the franchiser grants rights to another company to open a retail store using the franchisers name and operating
_____________ purchasing another company already operating in that area
_____________ means the process of combining the higher labor skills and technology available in developed countries with the
lower-cost labor available in developing countries. Often called outsourcing
_____________ are typically contracts for the construction of operating facilities in exchange for a fee.
_____________ offer a means through which a corporation can use some of its personnel to assist a firm in a host country for a
specified fee and period of time.
_____________ the concept that two businesses will generate more profits together than they could separately
_____________ diversifying into an industry unrelated to its current one.
_____________ is, in effect, a timeoutan opportunity to rest before continuing a growth or retrenchment strategy. It is
_____________ is a dcision to do nothing newa choice to continue current operations and policies for the foreseeable future.
_____________ is a decision to do nothing new in a worsening situation but instead to act as though the companys problems are only
_____________ emphasizes the improvement of operational efficiency and is probably most appropriate when a corporations
problems are pervasive but not yet critical.
_____________ is the initial effort to quickly stop the bleeding with a general, across-the board cutback in size and costs.

_____________ implements a program to stabilize the now leaner corporation.

_____________ involves giving up independence in exchange for security
If the corporation has multiple business lines and it chooses to sell off a division with low growth potential, this is called
_____________ involves giving up management of the firm to the courts in return for some settlement of the corporations
_____________ is the termination of the firm
_____________ (sometimes called problem children or wildcats) are new products with the potential for success, but they need a
lot of cash for development.
_____________ are market leaders that are typically at the peak of their product life cycle and are able to generate enough cash to
maintain their high share of the market and usually contribute to the companys profits.
_____________ typically bring in far more money than is needed to maintain their market share.
_____________ have low market share and do not have the potential (because they are in an unattractive industry) to bring in much
_____________ in contrast, views a corporation in terms of resources and capabilities that can be used to build business unit value as
well as generate synergies across business units
_____________ is an organizational unit that embodies a set of capabilities that has been explicitly recognized by the firm as an
important source of value creation, with the intention that these capabilities be leveraged by and/or disseminated to other parts of the
_____________ is a corporate strategy that cuts across business unit boundaries to build
synergy across business units and to improve the competitive position of one or more business
____________ large multi-business corporations compete against
other large multi-business firms in a number of markets.
3 Grand Strategies (GRS)
1. Growth strategies
2. Stability strategies
3. Retrenchment strategies

Growth Strategies -- 2 Basic forms

Basic Concentration Strategies
Vertical growth
Horizontal growth
Vertical Growth
Backward integration
Forward integration

Vertical integration
Full integration
Taper integration

Long-term contract

International Entry Options




Joint Ventures


Green-Field Development

Production Sharing

Turnkey Operation

BOT Concept (Build, Operate, Transfer)

Management Contracts

Basic Diversification Strategies

Concentric Diversification

Conglomerate Diversification

Stability Strategies

Pause/proceed with caution

No change

Profit strategies

Retrenchment Strategies -


Captive Company Strategy- giving up independence in exchange of security the company searches for an angel
by offering captive company to its largest customer.

Selling out

Bankruptcy- court settlement


Corporate Parenting Strategy -

Strategic factors

performance improvement

Analyze fit