Corporate Level strategy Flashcards
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a strategy that focuses on gaining long-term revenue, profits, and market value through managing operations in multiple businesses.
6.1. Corporate-level strategy
– the process of firms expanding their operations by entering new business.
6.2. Diversification
a firm entering a different business in which it can benefit from leveraging core competencies, sharing activities, or building activities, or building market power.
6.3. Related diversification
– costs savings form leveraging core competencies or sharing related activities among business in a corporation.
6.4. Economies of scope
– a firm’s strategic resources that reflects the collective learning in the organization.
6.5. Core competencies
– having activities of two or more businesses’ value chains done by one of the businesses.
6.6. Sharing activities
– firms’ abilities to profit through restricting or controlling supply to a market or coordinating with other firms to reduce investment.
6.7. Market power
– the improvement in bargaining position relative suppliers and customers.
6.8. Pooled negotiating power
an expansion or extension of the firm by integrating preceding or successive production processes.
6.9. Vertical integration
– a perspective that the choice of a transaction’s governance structure, such as vertical integration or market transaction, is influenced by transaction costs, including search, negotiating, contracting, monitoring, and enforcement costs, associated with each choice.
6.10. Transaction cost perspective
a firm entering a different business that has little horizontal interaction with other businesses of a firm.
6.11. Unrelated diversification
the positive contributions of the corporate office to a new business as a result of expertise and support provided and not a result of substantial changes in assets, capital structure, or management.
6.13. Parenting advantage
the intervention of the corporate office in a new business that substantially changes the assets, capital structure, an/or management, including selling off parts of the business, changing the management, reducing payroll and unnecessary sources of expenses, changing strategies, and infusing the new business with new technologies, processes, and reward systems.
6.14. Restructuring
a method of (a) assessing the competitive position of a portfolio of businesses within a corporation, (b) suggesting strategic alternatives for each business, and (c) identifying priorities for the allocation of resources across the businesses.
6.15. Portfolio management
the incorporation of one firm into another trough purchase.
6.16. Acquisitions
