Strategy Formulation: Functional Strategy and Strategic Choice Flashcards
(43 cards)
An approach taken by a functional area to achieve corporate and
business unit objectives and strategies by
maximizing resource productivity
Functional Strategy
A functional strategy that
deals with pricing, selling, and distributing a
product.
Marketing Strategy
A marketing
strategy in which a company or unit develops
new products for existing markets or develops
new products for new markets.
Product Development Strategy
A successful brand name to
market other products and it is a good way to
appeal to a company’s current customers.
Brand Extension
A marketing strategy in which a
company charges a high price while a product is
novel and competitors are few.
Skim pricing
: A marketing strategy in which
advertising pulls the products through the
distribution channels.
Pull strategy
A marketing strategy in which a
large amount of money is spent on trade
promotion in order to gain or hold shelf space in
retail outlets.
Push strategy
A marketing pricing
strategy to obtain dominant market share by
using low price.
Penetration pricing
A marketing practice in
which different customers pay different prices
for the same product or service.
Dynamic pricing
A functional strategy to
make the best use of corporate monetary assets.
Financial Strategy
A corporate growth
strategy that expands product lines by moving
into another industry.
Diversification Strategy
An acquisition in which a
company is acquired in a transaction financed
largely by debt—usually obtained from a third
party, such as an insurance company or an
investment banker.
Leveraged buy-out
A stock split in which an
investor’s shares are reduced for the same total
amount of money.
Reverse stock split
A functional strategy that deals
with product and process innovation.
R&D strategy
: A company that pioneers
an innovation.
Technological leader:
It also deals with the appropriate mix of different
types of R&D:
Basic,
Product, or
Process
A company that
imitates the products of competitors
Technological follower
And with the question of how new technology
should be accessed—through:
Internal development,
External acquisition, or
Strategic alliances
A new approach to R&D in
which a firm uses alliances and connections with
corporate, government, and academic labs to
learn about new developments.
Open innovation
A functional strategy that
determines how and where a product or service
is to be manufactured, the level of vertical
integration in the production process, and the
deployment of physical resources.
Operations strategy
One-of-a-kind production using
skilled labor.
Job shop
A part of a
corporation’s manufacturing strategy in which
components are standardized and each machine
functions like a job shop but is positioned in the
same order as the parts are processed.
Connected line batch flow
A type of
manufacturing that permits the low-volume
output of custom-tailored products at relatively
low unit costs through economies of scope.
Flexible manufacturing
A highly automated
assembly line making one mass-produced
product using little human labor.
Dedicated transfer line
