Lecture 2 Flashcards
What is corporate strategy about?
What business areas to be active in, what directions may an organisation pursue, resource allocation among units
What are the blocks of corporate strategy?
Ownership type, scope (horizontal/geographic), organisational design
What does a diversified company need to create?
A corporate advantage
What is a corporate advantage
When the sum of the parts is greater than their value seperately
What has to be in place in order to achieve corporate advantage?
A key competence (vacuums for dyson); could also be intangible
What makes a good key competence?
Inimitable, provides access to wide range of markets
What are the benefits of vertical integration?
technical economies (distance between facilities), avoidance of transaction costs
What are the costs of vertical integration?
complicates management
differences in optimal scale between stages of the value chain (piwa i puszki)
many capabilties req
incentive problems (some links may stop being competitive)
Some elements are unattractive
What are the 4 directions in Ansoff’s growth matrix?
Market penetration
Market development
Prooduct development
Diversification (conglomerate)
What are the types of motives for M&As?
Managerial, Financial and Strategic
What are the pre-merger challenges?
identifying goals and benefits
What are the post-merger challenges?
integration, learning and managing for achieving goals
When should you build?
When you internal resources are relevant
When should you borrow via contract?
When resources are tradeable
When should you borrow via alliance?
When resources are not tradeable and goals of firms align
