Business-Level Strategy
Three levels of firm strategy?
corporate-level, business-level, functional-level
A strategy that allows a firm to streamline its operations by taking direct ownership of various stages of its production process
vertical integration
Name the first stage of the industry life cycle
introduction stage
What acquisition did Amazon make in 2017 to enter the grocery industry?
Whole Foods
What was the primary goal behind Microsoft’s acquisition of Nokia’s Devices division in 2013?
To boost its smartphone presence and create synergy with Windows Phone software
Two main sources of firms' competitive advantage?
cost advantage, differentiation advantage
Two main managerial decisions/questions for corporate-level strategy?
What businesses should the firm compete in?;
How should the firm manage its portfolio of various business lines to achieve synergy?
Which stage of the industry life cycle is characterized by a strong increase in sales and attractiveness to potential competitors?
growth stage
What type of diversification did GE (General Electric) pursue across different industries?
unrelated diversification
What company did Best Buy acquire in 2002 to add in-house tech support and service differentiation?
Geek Squad
Name the three generic business-level strategies.
cost leadership, differentiation, focus
What type of diversification does Disney's overall business portfolio exemplify?
unrelated diversification
In which life cycle stage do marginal competitors typically exit?
maturity stage
How did Disney create synergies across its business lines?
By leveraging its characters and stories across various business units (media networks, parks, and consumer products).
corporate-level strategy
One potential downside of a cost leadership strategy?
thin profit margins, perception of lower quality, price wars, and/or limit the firm's ability to innovate/respond to market changes
What type of diversification does Disney's acquistion of Marvel and Pixar exemplify?
related diversification
What strategy is often used in the decline stage of the industry life cycle?
market exit
In 2022, AT&T spun off which media subsidiary to merge it with Discovery?
WarnerMedia
What company did PepsiCo acquire in 2001 as part of its related diversification strategy?
Quaker Oats
Name one primary activity and one supporting activity in the value chain that supports differentiation
Primary activity: superior craftsmanship, personalized customer service, exclusive partnerships, premium branding and exclusive launch events, superior-quality raw materials, etc.
Supporting activity: programs to attract talented engineers and scientists, substantial R&D investments, etc.
Name two examples of corporate-level strategy
mergers and acquisitions (M&A), divestiture, strategic alliances, vertical integration, etc.
During the maturity stage, what becomes crucial for companies to maintain competitiveness?
cost efficiency
Name the three main areas GE decided to focus on as of 2024
aerospace, energy (GE Vernova), and healthcare.
Which two companies merged in 1998 in an attempt to create synergies in the automotive industry, but ultimately failed due to cultural clashes?
Daimler-Benz and Chrysler