BPL 5100 QUIZ 2
To create a competitive edge companies need to focus on ________________ - Answer- customers' evolving wants and needs
Porter's three generic strategies: - Answer- 1. Overall Cost Leadership
2. Differentiation
3. Focus
Differentiation is perceived from the____________ - A...
Differentiation is perceived from the____________ - Answer- client/customer
Differentiated goods are the opposite of__________ - Answer- luxury goods
Luxury goods are only for__________. Differentiated goods are marketed to
____________ - Answer- a niche group of people; everyone
Corporate Level Strategies are also known as____________ - Answer-
growth/expansion strategy
Concentration Strategy - Answer- -staying within your business segment (doing more
of the same thing in your area of expertise)
-Staying within your existing business area and opening more of the same in
different locations
Concentration Strategies add more ___________ - Answer- outlets/locations ex.
Every neighborhood has a Mcdonald's, every neighborhood has a Starbucks
The 3 components of concentration strategies are_____________ - Answer- 1.
Market penetration
2. Market development
3. Product Development
market penetration - Answer- making your place known in a market
Market development - Answer- going into new markets. Taking existing products and
selling to new markets
Product Development - Answer- developing new products within the same market
Diversification (growth) Strategies - Answer- Branching out ot new business areas
Modes of Diversification - Answer- Merger and Acquisitions
Alliances
Internal Development
mergers - Answer- joining with two equal companies
acquisitions - Answer- acquiring another company
, Internal Development - Answer- the most organic because it is all done with their
organizational capabilities, internally, in house
Diversification is often times _______________and_________________ - Answer-
risky; costly
most mergers and acquisitons are____________ - Answer- unsuccessful
Why do companies still pursue mergers and acquisitons although they are
unsuccessful? - Answer- Without risk you can't make money
Synergy - Answer- the power that results from the combination of two or more forces
Related diversification - Answer- More of the same types of products. Trying to share
intangible and tangible resource benefits.
ex. Pepsico taking on Tropicana
Reasons why companies pursue Related Diversification: - Answer- 1. Economics of
Scope
2. Enhancing Revenue/Differentiation
3. Market Power
4. Pooled Negotiation
5. Vertical Integration
Market Power - Answer- Restricting or controlling the supply chain to you
Pooled Negotiation (power) - Answer- restrict and keep competitors out
Backwards integration - Answer- buying out suppliers to control your upstream
Ex. toyota buying out seatbelt manufacturers so they can't sell those seatbelts to
anyone else)
Forward integration - Answer- buying out distributors to control your downstream)
(ex. Ford buying out dealerships so that everyone who sells Ford cars can sell it for
the same price)
Unrelated Diversification - Answer- creating or acquiring companies in completely
unrelated businesses
Parenting - Answer- Large corporation that owns smaller businesses
ex. Ex. Berkshire Hathaway owns Geico, Duracell, Fruit of the loom (no connection
between any of these companies)
Restructuring - Answer- redesigning an organization so that it can more effectively
and efficiently serve its customers
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