Market Penetration
Market Development
Product Development
100
Define vertical integration.
When a firm gets involved in new portions of the value chain
100
Which strategy involves a firm entering entirely new industries?
Diversification Strategies
100
True or False: Divestment can serve as a means to undo diversification strategies?
True
100
What is a process that helps executives make decisions involving their firms' various industries?
Portfolio Planning
200
_____ involves taking existing products and trying to sell them within new markets.
A. VERTICAL INTEGRATION
B.PRODUCT DEVELOPMENT
C. MARKET DEVELOPMENT
C. MARKET DEVELOPMENT
200
Name one risk of vertical integration.
1) takes the firm into very different businesses
2) creates complacency
200
Define unrelated diversification.
when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries
200
True or False: Liquidation usually result in a gain for the companies
False.
200
What are the two dimensions used to measure portfolio planning on the Boston Consulting Group Matrix?
Industry growth rate
Relative market share
300
What involves creating new products to serve existing markets?
Product Development
300
Differentiate backwards vertical integration from forwards vertical integration.
backward vertical integration involves the buyer entering the industry that it purchases goods or services from and forward vertical integration involves the supplier entering the industry that it supplies inputs to.
300
What is a core competency?
a skill set that is difficult for competitors to imitate, cane be leveraged in different businesses, and contributes to the benefits to be enjoyed by the customers within each business
300
Define Divestment
Selling off parts of a firms operations
300
True or False: A firm that is classified as a dog in the Boston Consulting Group Matrix should be sold if possible.
True
400
What are 2 Advantages to Horizontal Integration?
It can lower economies of scale.
Reduces intensity of a rivalry in the industry therefore making it more profitable
They have their own strategic resources such as a valuable brand
Access to new distribution channels
400
Which US company was the first to pioneer vertical integration?
Carnegie Steel
400
True or False: A proposed diversification move should pass four tests or it should be rejected.
false: it should pass three
400
What strategy for getting smaller was inspired by trench war fair?
Retrenchment
400
A star is (high/low) on industry growth rate, and (high/low) on relative market share.
high, high
500
Define Concentration Strategy
Actions that firms try to use to try to compete successfully only within a single industry
500
Which industry is most associated with vertical integration today?
Oil industry
500
Berkshire Hathaway is a holding company that uses unrelated diversification. Name two unrelated subsidiaries that it holds.
Geico, See's Candies, Fruit of the Loom, Heinz, Acme Brick Company, The Pampered Chef
500
What is the tendency of investors to undervalue the shares of a diverse firm, referring to?
Diversification Discount
500
Where would a company who's industry growth rate is low and their relative market share is high