Business-Level Strategy
Three levels of firm strategy?
corporate-level, business-level, functional-level
What type of diversification does Disney's acquisition of Marvel and Pixar exemplify?
related diversification
Best Buy offers services like in-home tech consultations, price matching, and personalized customer service—features that are considered unique in the consumer electronics retail industry. Does this exemplify a cost leadership strategy or a differentiation strategy?
differentiation strategy
GE expanded beyond its original focus on lighting and electrical solutions into several distinct industries, including healthcare, aviation, power generation, financial services, and entertainment. What type of diversification strategy did GE pursue by entering these unrelated industries?
unrelated diversification
Professor Park arrived 10 minutes late last Wednesday. Do you remember what happened to him that morning?
He had a nosebleed.
Two main sources of firms' competitive advantage?
cost advantage, differentiation advantage
What type of diversification does Disney's overall business portfolio exemplify?
unrelated diversification
What was Microsoft’s main reason for acquiring Nokia’s Devices division in 2013?
to strengthen its smartphone presence and create synergy with its Windows Phone software.
How did Disney create synergies across its business lines?
By leveraging its characters and stories across various business units (e.g., media networks, theme parks, licensing, and consumer products).
What do you say if you want to order a Coke in Korea?
Cola (콜라)
"Cola juseyo" ("콜라 주세요") literally means "Please give me a Coke."
Name the three generic business-level strategies.
cost leadership, differentiation, focus
A strategy that allows a firm to streamline its operations by taking direct ownership of various stages of its production process
vertical integration
Which semiconductor firm that specializes solely in manufacturing exemplifies a pursuit of a differentiation strategy?
Hint: This company is headquartered in Taiwan
TSMC (Taiwan Semiconductor Manufacturing Company)
Best Buy's expansion into digital healthcare exemplifies which level of strategy?
corporate-level strategy
What company did Best Buy acquire in 2002 to add in-house tech support and service differentiation?
Geek Squad
Two potential downsides 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
Name the three main business areas GE decided to focus on as of March 2024
General Electric (GE) has spun off into three independent, public companies:
GE Aerospace (aerospace)
GE Vernova (power and renewable energy)
GE HealthCare (healthcare).
Elena is the founder and CEO of Eco Packaging, a company that produces biodegradable packaging materials for consumer goods. She recently decided to acquire a chain of organic grocery stores so she can sell her own packaged products directly to end customers. Elena will engage in: ?
forward vertical integration
In 2022, AT&T spun off WarnerMedia, its media subsidiary, to merge it with Discovery. Briefly explain two reasons why AT&T made this decision.
Refocus on core business
Lack of expected synergies
Reduce debt and streamline operations
Which company did PepsiCo acquire in 2001 as part of its related diversification strategy?
Hint: Its name is linked to the Society of Friends.
Quaker Oats
How could Carlsberg’s Green Fiber Bottle initiative support a differentiation strategy? Provide one line of justification or reasoning.
** The Green Fiber Bottle is a sustainable beer bottle made primarily from plant-based materials. Carlsberg is one of the first major brewers to invest in this type of eco-friendly packaging.
• The first-mover advantage in sustainable beer packaging.
• Appeals to eco-conscious consumers, aligning with sustainability trends.
• Supports premium pricing for customers willing to pay more for sustainability.
• Enhances brand equity, making Carlsberg a leader in sustainable innovation.
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?
What are two reasons why GE decided to split into three independent companies in 2024?
Hint: Consider the challenges of managing a highly diversified conglomerate.
By creating three separate companies, each will benefit from greater focus, more tailored capital allocation, and increased strategic flexibility—helping drive long-term growth and value.
Which company did Amazon acquire in 2018 to enter the online pharmacy business?
** This startup specialized in delivering prescription medications in pre-sorted packages.
PillPack
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