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MGT - Strategic Management > CHAPTER 7 > Flashcards

CHAPTER 7 Flashcards

1
Q

The purchase of a company that is completely absorbed by the acquiring corporation.

A

acquisition

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2
Q

Assuming a function previously provided by a supplier.

A

backward integration

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3
Q

A retrenchment strategy that
forfeits management of the firm to the courts
in return for some settlement of the corporation’s obligations

A

bankruptcy

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4
Q

A simple way to portray a corporation’s portfolio of products or divisions in terms of growth and cash flow.

A

BCG (Boston Consulting Group)
Growth-Share Matrix

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5
Q

A type of international entry option for a company. After building a facility, the company operates the facility for a fixed period of time during which it earns back its investment, plus a profit

A

BOT (Build, Operate, Transfer)
concept

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6
Q

Dedicating a firm’s productive capacity as primary supplier to another company in exchange for a long term contract.

A

captive company strategy

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7
Q

A product that brings in far more money than is needed to maintain its market share

A

cash cows

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8
Q

A corporate growth strategy that concentrates a corporation’s resources on competing in one industry

A

concentration

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9
Q

A diversification growth strategy in which a firm uses its current strengths to diversify into related products in another industry.

A

concentric diversification

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10
Q

A diversification growth strategy that involves a move into another industry to provide products unrelated to its current products.

A

conglomerate diversification

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11
Q

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

A

corporate parenting

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12
Q

A strategy that states a company’s overall direction in terms of its general attitude toward growth and the management of its various business and product lines

A

corporate strategy

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13
Q

A plan that is composed of three general orientations: growth, stability, and retrenchment.

A

directional strategy

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14
Q

A corporate growth strategy that expands product lines by moving into another industry.

A

diversification

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15
Q

A retrenchment strategy in which a division of a corporation with low growth potential is sold.

A

divestment

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16
Q

have low market share and do not have the potential (because they are in an unattractive industry) to bring in much cash.

A

dogs

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17
Q

Shipping goods produced in a company’s home country to other countries for marketing.

A

exporting

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18
Q

Assuming a function previously provided by a distributor

A

forward integration

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19
Q

An international entry strategy in which a firm grants rights to another company/individual to open a retail store using the franchiser’s name and operating system.

A

franchising

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20
Q

a firm internally makes 100% of its key supplies and completely controls its distributors

A

full integration

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21
Q

A portfolio analysis matrix developed by General Electric, with the assistance of the McKinsey & Company consulting firm

A

GE business screen

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22
Q

An international entry option to build a company’s manufacturing plant and distribution system in another country

A

green-field development

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23
Q

A directional strategy that expands a company’s current activities.

A

growth strategies

24
Q

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.

A

horizontal growth

25
Q

The degree to which a firm operates in multiple geographic locations at the same point in an industry’s value chain.

A

horizontal integration

26
Q

A corporate parenting strategy that cuts across business unit boundaries to build synergy across business units
and to improve the competitive position of one or more business units

A

horizontal strategy

27
Q

An independent business entity created by two or more companies in a strategic alliance

A

joint venture

28
Q

The termination of a firm in which all its assets are sold.

A

liquidation

29
Q

Agreements between two separate firms to provide agreed-upon goods and services to each other for a specified period of time

A

long-term contracts

30
Q

Agreements through which a corporation uses some of its personnel to assist a firm in another country for a specified fee and period of time.

A

management contracts

31
Q

A transaction in which two or more corporations exchange stock, but from which only one corporation survives

A

merger

32
Q

A rivalry in which a large multibusiness corporation competes against other large multibusiness firms in a
number of markets.

A

multipoint competition

33
Q

A decision to do nothing new; to continue current operations and policies for the foreseeable future.

A

no-change strategy

34
Q

The manner in which management coordinates activities and transfers resources and cultivates capabilities among product lines and business unit

A

parenting strategy

35
Q

A corporate strategy in which nothing new is attempted; an opportunity to rest before continuing a growth or retrenchment strategy.

A

pause/proceed with caution strategy

36
Q

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.

A

portfolio analysis

37
Q

The process of combining the higher labor skills and technology available in developed countries with the
lower-cost labor available in developing countries.

A

production sharing

38
Q

A strategy that artificially supports profits by reducing investment and short-term discretionary expenditures

A

profit strategy

39
Q

A type 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

A

quasi-integration

40
Q

New products that have potential for success and need a lot of cash for development

A

question marks

41
Q

Corporate strategies to reduce a company’s level of activities and to return it to profitability.

A

retrenchment strategies

42
Q

A retrenchment option used when a company has a weak competitive position resulting in poor performance

A

sell-out strategy

43
Q

Corporate strategies to make no change to the company’s current direction or activities

A

stability strategy

44
Q

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 company’s profits

A

stars

45
Q

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

A

synergy

46
Q

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.

A

taper integration

47
Q

A theory that 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

transaction cost economics

48
Q

A plan that emphasizes the improvement of operational efficiency when a corporation’s problems are pervasive but not yet critical.

A

turnaround strategy

49
Q

are typically contracts for the construction of
operating facilities in exchange for a fee

A

turnkey operations

50
Q

A corporate growth strategy in which a firm takes over a function previously provided by a supplier or distributor

A

vertical growth

51
Q

The degree to which a firm operates in multiple locations on an industry’s value chain from extracting raw materials to retailing.

A

vertical integration

52
Q

Directional strategy is composed of three general orientations (sometimes called grand strategies)

A

Growth Strategies
stability strategies
Retrenchment Strategies

53
Q

vertical integration continuum

A

full integration
taper integration
quasi- integration
long-term contract

54
Q

diversification strategies

A

Concentric (Related) Diversification
Conglomerate (Unrelated) Diversification

55
Q

STABILITY STRATEGIES

A

Pause/Proceed with Caution Strategy
No-Change Strategy
Profit Strategy

56
Q

RETRENCHMENT STRATEGIES

A

Turnaround Strategy
Captive Company Strategy
Sell-Out/Divestment Strategy
Bankruptcy/Liquidation Strategy

MGT - Strategic Management (16 decks)

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