Key Business Strategies and Corporate Operations
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Backward Integration
Assuming a function previously provided by a supplier.Bankruptcy
A company gives up management of the firm to the court.Competitive Strategies
Cost leadership, differentiation, and focus.Concentric Diversification
Growth into a related industry with a strong competitive position.Conglomerate Diversification
Diversifying into an industry unrelated to its current one.Cooperative Strategies
The direction of the firm as a whole and the management of its business or product.Corporate External Growth Strategies
Funds to purchase other companies.Defensive Tactics
Takes place in the firm’s own current market position as a defense against rivals.Economies of Scale
Cost falls as the company benefits at a higher level.Executive Types and Corporate Strategies
Dynamic industry expert, analytical, cautious, turnaround, professional.Feasibility of a Strategy
Resources required to implement the strategy are available, can be developed, or obtained.Financial Strategy
The financial implication of corporate and business-level strategic options and the management of dividends.Forward Integration
Assuming a function previously provided by a distributor.Functional Strategy
Corporate business unit objective strategies by maximizing resource productivity.Horizontal Growth
Expansion of operations into other geographic locations at the same point in the product and service value chain.Horizontal Integration
Multiple geographic locations.International Entry Strategies
Exporting, licensing, franchising, joint venture, production sharing, build, operate, transfer.International Strategies
Partners, function strategy.Liquidation
Management terminates the firm.Loss-Leader Pricing
Selling a product at or below cost value.Market Location Tactics
Where the company implements a strategy.Marketing Strategy
Pricing, selling, distributing.MNC (Multinational Corporation)
A developed international company with deep involvement throughout the world.Offensive Tactics
Takes place in an established competitor’s market location.Operations Strategy
How and where the product should be manufactured.Penetration Pricing
Market development pioneers the opportunity to use the experience curve to gain market share.Procedures
Details out a complete corporation’s program.Programs
A collection of tactics taken by an organization.Pull Strategy
Advertising to pull products through the distribution channels.Purchasing Strategy
Raw materials, parts, and supplies: multiple, solo, parallel.Push Strategy
Spending a large amount of money on trade promotion.R&D Strategy
Deals with product and process innovation and improvement.Reasons for Acquisition Failures
Companies simply pay too much for the companies they acquire, lack of strategic clarity, poor integration planning, and execution.Six Sigma
Define, measure, analyze, improve, establish.Skim Pricing
Opportunity from the top of the demand curve with a high price.Stability Strategies
No change in the company.Strategic Implementation Problems
Ineffective coordination, employees with insufficient capabilities, uncontrollable environmental factors, implementation tasks, and activities.Strategy Development
Build a team, market research, contract, and supplier relations.Strategy Formulation
Mission, SWOT, level of corporate (levels of strategy).Strategy Implementation
The sum total of all activities and choices required for the execution.Strategy Implementation in Large, Multi-Industry Corporations
Everyone is involved.Synergy
Exists for a divisional corporation if the return on investment is greater than what the return would otherwise be.Technological Follower
Imitating the product.Technological Leader
Pioneering an innovation.Turnaround Strategy
A strategy to reverse a company from declining to profitable.Types of Chief Executive Officers
CEO, COO, CFO, CMO, CIO.Vertical Growth
Achieved by taking over a function previously provided by a supplier or distributor.Vertical Integration
The degree to which a firm operates in multiple locations on an industry’s value chain.