MCQ Flashcards
(20 cards)
5 forces of the Porter Model
- New entrants
- Suppliers
- Buyers/customers
- Competition
- Substitutes
What the the goal of scale alliances?
Increase scale to reduce costs
What is the goal of complementary alliances?
Combine skills to produce innovation and differentiation
What does the experience curve tell us?
As the cumulative production of a
product doubles, the unit cost of
that product decreases by a
constant percentage (15% < k < 30%)
What are the two generic strategies?
- Cost leadership
2. Differentiation
What is necessary for cost leadership to work?
- Economies of scale
What is necessary for differentiation to work?
- Customer perception
- Hard to imitate
- Economically viable
What can reinforce demand and is important to realize increases in WTP - cost?
Network externalities
What is called a two-sided market?
A market where there is a need to simultaneously convince client-firms and service providers to adopt a product
What is business strategy?
Concerned with industry, firm competition and competitive advantage
What is corporate strategy?
Concerned with firm scope, portfolio, growth and corporate advantage
The 3 modes of growth
Vertical integration, business integration, international expansion
Disadvantages of vertical integration
- converts variable costs into fixed costs
2. blurs knowledge of costs
Disadvantages of vertical integration
- converts variable costs into fixed costs
2. blurs knowledge of costs
Industry in which competition takes place on a worldwide scale.
Global industry
What are CAGE differences?
Cultural, Administrative, Geographic & Economic
There is a trade-off between CAGE and what?
ECONOMIES of SCALE &
OPPORTUNITIES FOR ARBITRAGE and LEARNING
Standardization vs
Adaptation
Reasons for vertical integration
- hold-up
- transaction costs
- specific assets
5 advantages for diversification
- Risk spreading
- Utilize all resources
- Maximize growth
- Benefits from size
- Synergies (main one)
