Term
| Vertical Integration Benefits |
|
Definition
Secure critical supplies
Lower cost
Improve quality
Facilitate schedule/planning (improve efficiency) |
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Term
| Vertical Integration Risks |
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Definition
Increase costs
Reduce quality
Reduce flexibility
Legal repercussions |
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Term
| Horizontal integration pros |
|
Definition
lower costs
Increase value
increase bargaining power
Increase differentiation
manage industry rivalry |
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Term
| Horizontal Integration Cons |
|
Definition
Fail to create value
Implentation is not easy
Fail to produce gains
Conflict with anti-trust agency |
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Term
|
Definition
Vertical- along value chain
Horizontal - product/supplies
Geographic - market |
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Term
| BCG Matrix? Name the 4 and earnings/strategy |
|
Definition
Cash Cow: high earnings/hold
Star: high earnings/ hold or invest
Dog: low earnings/ divest
? : low or growing / increase diversity |
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Term
| Advantages of staying in a single industry |
|
Definition
Focus resources and capabilities on competing successfully in one area
Focus on what the company knows and does best |
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Term
| Advantages of moving out from a single industry |
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Definition
REduce dependence on fortune of one industry
exploit the opportunity to leverage resources and capabilities to other activities
create knew opportunities to learn
hold competitor in check |
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Term
| What are the Options for strategic growth |
|
Definition
Integration (horizontal/vertical)
Strategic Outsourcing
Diversification |
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Term
| Corporate Strategy (what are the 3 main) |
|
Definition
Economies of scale
Economies of scope
Transaction costs |
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Term
|
Definition
| Process of comparing business processes and performance metrics to industry bests of best practices. |
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Term
| Drivers of Competitive rivalry |
|
Definition
Market commonality
Market Dynamics
-size
-growth
-structure
Resource similarity
Awareness
Motivation
Ability |
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Term
| Continuous budgets maintain a (blank) to (blank) month projection into the future. |
|
Definition
|
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Term
| What is the measurement criteria? |
|
Definition
Determine what to measure
Establish standards
Measure actual performance
Compare actual vs standard
Take corrective action |
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Term
| What performance measure does the Shareholder model use for a company |
|
Definition
|
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Term
| What performance measure does the stakeholder model use for a company |
|
Definition
| Satisfy interests of stakeholders |
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Term
| What are the 4 components of the Balanced Scorecard? |
|
Definition
Financial
Customer
Innovation/Growth
Internal Processes |
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Term
| Balanced Scorecard: How would you use it? |
|
Definition
Get an objective
Get a measure
Set targets
Plan initiatives |
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Term
| Name examples of financial performance measurements |
|
Definition
ROA
ROS
ROI
Cash Flow
Profitability |
|
|
Term
|
Definition
| A diagram that is used to document the primary strategic goals being pursued by an organization or management team |
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Term
| Strategic Mapping may help to better: |
|
Definition
Link strategic initiative and resources throughout the org
expose gaps and make multiple strategies more cohesive
integrate strategic and financial planning processes
add to the communication process through visual tools |
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|
Term
| What are the blocks of the strategy tower? |
|
Definition
Mission
Vision statement
Objectives
Strategy
"Campaigns"
Tactical Actions |
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|
Term
(common strategic rationales for an acquisition)
Overcapacity: |
|
Definition
| The acquiring company will eliminate capacity, gain market share and create a more efficient operation |
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|
Term
(common strategic rationales for an acquisition)
Geographic Expansion |
|
Definition
| A successful company expands geographically, operating units remain local |
|
|
Term
(common strategic rationales for an acquisition)
Product or market expansion |
|
Definition
| Acquisitions extend a company's product line or its international exchange |
|
|
Term
(common strategic rationales for an acquisition)
R&D |
|
Definition
| Acquisitions are used in lieu of in-house R&D to build a market position quickly |
|
|
Term
(common strategic rationales for an acquisition)
Industry Convergence |
|
Definition
| A company bets that a new industry is emerging and tries to establish a position by culling resources from existing industries whose boundaries are eroding |
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Term
| Equity Alliance leads to... |
|
Definition
| Partial ownership leads to stronger trust and ties |
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Term
| What 3 factors should you consider before an Alliance or Acquisition? |
|
Definition
1) Resources and synergies desired
2) Marketplace environment
3) Competencies at collaborating |
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|
Term
| What are the arguments for Acquisitions? |
|
Definition
Achieves horizontal integration
Achieves diversification when the company lacks important competencies
Supports quick move
Less risky than internal new ventures |
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|
Term
| What are the arguments against Acquisitions? |
|
Definition
Post acquisition integration is difficult and may be unanticipated
Economic benefits are often overestimated
Hard to estimate the power of hubris
Pre-screening is often rushed |
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Term
|
Definition
Comparable Analysis: Revenues
or
DCF: PV of free cash flows |
|
|
Term
|
Definition
"try before you buy" concept
Stepping stone before full integration of partnership |
|
|
Term
|
Definition
Screen potential deals
Reach initial agreement
Conduct due diligence
Set final terms
Achieve closure |
|
|
Term
| Most mergers and acquisitions (x) shareholder value because anticipated synergies never materialize |
|
Definition
|
|
Term
| What are the most common reasons a firm would enter an alliance? |
|
Definition
1) Strengthen competitive positions
2) enter a new market
3) hedge against uncertainty
4) access critical complementary resources
5) learn new capabilities |
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|
Term
| What are the challenges of maintaining change? |
|
Definition
Competition
Technology
Economic volatility
New regulations
New measurements
M&A's |
|
|
Term
| What are the 3 tensions every company faces? |
|
Definition
Profitability vs Growth -business model/strategy
ST vs LT -management model
Whole vs Part -organizational model |
|
|
Term
Who quoted this?
"You know, I'm all for progress. It's change I object to." |
|
Definition
The Mark Twain Dillemma: Theory/Practice of Change leadership
-Mark Twain |
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|
Term
| What are the FUD factors? |
|
Definition
|
|
Term
| What are the 6 rules for success? |
|
Definition
1) Create a simple compelling case for change
2) Communicate constantly ad honestly throughout the whole process
3) Maximize participation
4) If all else fails, remove those who resist
5) Generate short term wins
6) Set an example |
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|
Term
|
Definition
Structure
Strategy
Skills
Staff
Style
Super-ordinate goals
Systems |
|
|
Term
What reading is this quote from?
"The essence of strategy lies in creating tomorrow's competitive advantage faster than competitors mimic the ones you possess today"
-Gary Hamel & CK Prahalad |
|
Definition
| Unconventional insights for managing stakeholder trust |
|
|
Term
| What are the 4 key things to have to manage stakeholder trust? |
|
Definition
Trust
Technical competence
Transparency
Value congruence |
|
|
Term
| What are Porters 5 forces? |
|
Definition
Threat of Rivals
Threat of substitutes
Barriers to entry
Bargaining power of Suppliers
Bargaining power of buyers |
|
|
Term
| PESTEL, what are the things? |
|
Definition
Political
Economical
Sociocultural
Technological
Ecological
Legal |
|
|
Term
| What are the stages of the industry life cycle? |
|
Definition
Embryonic
Growth
Shakeout
Mature
Decline |
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