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Strategies in MNEs > Strategy in MNEs > Flashcards

Strategy in MNEs Flashcards

1
Q

What is the Zone of Acceptance?

A

Stakeholder’s tolerance for actions.
Possibility of resistance/withdrawal
Perceived distance betw. expectation and actual action
Relative power of stakeholders

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2
Q

What is managerial awareness?

A

Action of mgmt. depends on allocation of attention

Describes potential actions of a manager

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3
Q

What is managerial discretion?

A

Latitude of action for managers (= support of stakeholders)

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4
Q

How do CEO Decisions influence the ZoA

A

ZoA affects CEO-decisions which affect the ZoA

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5
Q

What is the aspiration level dependant on?

A

Past performance of self and others, as well as other factors

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6
Q

What are 3 principles of Cash-based financial value?

A

Free Cash Flow Principle, Discounting Principle, Cost of Capital principle

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7
Q

What are 3 principles of profit based financial value?

A

Capital productivity and efficiency, EVA, ROI and profit concepts

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8
Q

What is the FV when calculated cash based?

A

Sum of discounted (1-WACC) Free Cash Flow (FCF)

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9
Q

What is the FV when calculated profit based?

A

Sum of discounted EVA (ROI-WACC) + IC

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10
Q

What is capital income

A

Profit + Interest paid

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11
Q

How can ROI be calculated?

A

NOPAT (= EBIT-T) / IC

Sales profit margin (=NOPAT/Rev) / Capital Turnover = Rev / IC

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12
Q

How can EVA be calculated?

A

NOPAT - Cost of Capital

(ROI-WACC)*IC

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13
Q

What are measures to increase the EBIT

A

Profit Management: Product, price; Process efficiency, Administ. Cost

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14
Q

What are measures to decrease the Cost of Capital

A

Asset Management: Down payments, liquidity mgmt

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15
Q

What levels of strategy are there in a firm?

A

Corporate level, product area level, regional area level, product/region level, functional level, resource level

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16
Q

What is competitive advantage?

A

V/P is greater 1 and higher than v/p of competition. And the area of value providing is important to the customer and defendable against comp.

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17
Q

What is the standard of comparison for corporate advantage?

A

Other firms as potential owners of own businesses.

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18
Q

What is the cause of corporate advantage?

A

Better management at the corporate level leading to horizontal integration and vertical intervention

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19
Q

What is the relationship between competitive advantage and total added value?

A

Profitable comp. adv. can only be achieved if a higher total added value exists compared to comp.

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20
Q

What are 5 forces that change a firm?

A

Un-/anticipated events in the external environment, Management Process, un-/intended behavior within the firm

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21
Q

What are the 3 parts of the management process

A

Initiation, Formulation, Implementation

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22
Q

What are the stages of initiation in the management process?

A
  1. Perception: What is going on?
  2. Identification: do we have a problem? Which?
  3. Structuring: Subproblems
  4. Processing: What do we need to do to have a strategy?
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23
Q

What are the stages of formulation in the management process?

A

External/Internal analyses leading to strategy options, which are evaluated under the objectives to form a strategic plan

24
Q

What are the stages of strategy implementation in the management process?

A

Structures/Systems as support, plans of operations in the value chain, envisioning/enabling/empowering people, Strategy control

25
Q

What are some parts of the analyses for revenues?

A

Ext: PESTEL, Competition, Demand
Int: Value/Price to customer

26
Q

What are some parts of the analyses for costs?

A

Ext: Suppliers, PESTEL
Int: Value chain

27
Q

What leads to a competitive advanage?

A

Either market position (external) or resource base (internal)

28
Q

What types of comp. adv. are there?

A 
Value advantage (differentiation)
Price advantage (price leadership)
29
Q

What does the industry environment consist of?

A

Customer, Competition, Company

30
Q

What is the relationship between the industry env. and the macro environment?

A

Macro env. affects industry env. and therefore affects all firms the same, hence little influence

31
Q

How does the industry structure influence the profitability?

A
  1. Value to the customer
  2. Relative bargaining power (customer/producer)
  3. Relative bargaining power (supplier/producer)
  4. Intensity of competition
32
Q

What are Porter’s 5 forces?

A
  1. Cusomer (bargaining power)
  2. Supplier
  3. Potential entrants
  4. Substitute products
  5. Industry competition
33
Q

What is the resource based view based on?

A

Resources and capabilities to deploy them through Structures, processes, systems.

VRIN Capabilities

34
Q

What are the 5 elements that form a strategy?

A 
Arenas (which markets)
Differantiators (Which comp. adv.)
Financials (How will we get profit)
Vehicles (business system)
Staging/Timing: Speed and sequence of moves
35
Q

What are the 4 fields of strategy implementation?

A

Structures (roles, rights) and Systems (support)
Functional plans (goals and measures for units)
Env. Ena. Emp.
Strategic conrol (feedback loops)

36
Q

What are the 4 levels of a situation a company can be in?

A

Level 0: Healthy

1: Expectation problems
2: Performance problems
3: Liquidity problems

37
Q

What are the 5 strategy objectives?

A

Mission, Vision, Strategy, Structure, Systems

38
Q

What does portfolio management start with?

A

Scope, Performance and portfolio analysis

39
Q

What is a scope analysis?

A

What product and regional areas is the firm active in? Importance, Profitability, Ext. Conditions, Org Struct.

40
Q

What is the relationship between performance analysis and aggregation?

A

Past peformance: Disaggregation

Future performance: Aggregation

41
Q

What are the orders of time stability?

A
  1. Object stability
  2. Pattern stability
  3. Pattern change stability
42
Q

What are the concepts behind the BCG matrix?

A

Product life cycle –> Growth

Experience curve –> Share

43
Q

What are the degrees of product diversification?

A

Concentric diversification: Similar products –> Cost synergies
Relational div.: related but different value chains –> cost or revenue syn.
Conglomerate div: New products/markets

44
Q

What does outsidership depend on?

A

Type of dissimilarity

Level of distance

45
Q

What types of dissimilarity are there?

A

Economic, Cultural, Institutional, Geographic

46
Q

What are the 4 criteria to evaluate timing approaches in growth scenarios?

A
  1. Path dependency
  2. Constraints
  3. Urgency
  4. Complexity
47
Q

What are the advantages of M&A over internal development?

A

Faster, new competencies

48
Q

What are the advantages of internal development?

A

No partner needed, fit to existing operations

49
Q

What are the possible acquisition directions?

A

Vertical, Horizontal, Lateral

50
Q

What are criteria to classify M&A?

A

Direction, Relatedness, Regional, Attitude, Payment

51
Q

What are the stages of an acquisition process?

A
  1. Defining Objectives
  2. Acquisition Planning
  3. Take over
  4. Integration
    (4. ) Company Restructuring
52
Q

What are the planes of integration in an acquisition?

A

Strategic, Organizational, Structural, Cultural, External (Com. with stakeholders)

53
Q

How to calculate the gains when paid in cash?

A

Bidder: New value - Cash - Old Value

Target: Cash - Old value

54
Q

How to calculate the gains when paid in shares of bidder company?

A

Bidder/Target: New value * proportion of shares - old value

Proportion of shares: # old shares * exchange ratio for target shares = new target shares

55
Q

How to calculate the gains of a merger when paid in cash and shares

A

Bidder: (New value - Cash)*stock proportion - old value

Target: (New value - cash) * stock proportion + Cash - old value

56
Q

What is the historical perspective on corporate transformation?

A

1950: Decentralisation
1960: Diversification
1970: Portfolio Management
1980: Shareholder value
1990: Focus on corp. advantage through core competencies
2000: Parenting
2010: Growth globalization

57
Q

What are the 5 phases and changing issues in Greiner’s model?

A
  1. Creativity –> Lack of Leadership
  2. Direction –> Autonomy
    3 .Delegation –> Control
  3. Coordination –> Red Tape
  4. Collaboration

Strategies in MNEs (1 decks)

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