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MGMT 466 Final
Final Exam 6,7,8,13
| Question | Answer |
|---|---|
| Strategic Entrepreneurship | is taking entrepreneurship actions using a strategic perspective. The firm tries to find opportunities in external environment that it can exploit through innovations. |
| Corporate Entrepreneurship | the use or application of entrepreneurship within an established firm. |
| Entrepreneurship | individuals, teams, or organizations identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control. |
| Entrepreneurship Opportunities | are conditions in which new goods or services can satisfy a need in the market. They exist because of competitive imperfections in markets and among the factors of production used to produce them. |
| Innovation | a specific function of entrepreneurship |
| 3 types of innovative activities | 1. Invention 2. Innovation 3. Imitation |
| Invention | act of creating or developing a new product or process. |
| Innovation | process of creating a commercial product from an invention. begins after invention is chosen for development. Commercial criteria is used to determine success. |
| Imitation | the adoption of a similar innovation by differnt firms. Often leads to product/process standardization. Offered at lower prices, w/o many features. |
| Internal Innovation | most innovations come from efforts in R&D. Effetive R&D often leads to firms filing patents to protect their innovations. |
| Incremental Innovation | they build on existing knowledge bases adn provide small improvements in the current product lines. |
| Radical Innovations | usually provide significant technological breakthrough and create new knowledge |
| Internal Corporate Venturing | set of activities firms use to develop internal inventions and especially innovations. |
| Induced Strategic Bahavior | top-down process whereby the firm's current strategy and structure foster innovations that are closely associated with that strategy and structure. |
| Cross-Functional Teams | facilitate efforts to integrate activities associated with different organizational functions, such as design, manufacturing, and marketing. |
| Horizontal Organizational Structure | supports the use of cross-functional teams in their efforts to integrate innovation-based activities across organizational functions. |
| Strategic Leadership | set goals and allocates resources |
| Cooperative Strategies | alliances with other firms can contribute to innovations. they provide information on new business opportunities & how to exploit them. Also they align what they believe are complimentary assets with potential to lead to future innovations. |
| Corporate Level Strategies | are strategies firms use to diversify their operations from a single business competing in a single market into several product markets. |
| Value | determined by degree to which the business in the portfolio are worth more under the management of the company than they would be under any other owner. |
| Product Diversification | a primary form of corporate-level strategies, concerns the scope of the markets and industries in which the firm competes as well as "how managers buy, crete, and sell different businesses. |
| Single Business Diversification Strategy | where in the firm generates 95% or more of its sales revenue from its core business area |
| Dominant Business Diversification Strategy | firm generates 70% - 95% of its total revenue within a single business area |
| Related Constrained Diversification | when the links between the diversified firm's business are rather direct. |
| Related Linked Diversification | the diversified company with a portfolio of business that have only a few links between them. (mixed related and unrelated) |
| Unrelated Diversification Strategy | highly diversified firm that has no relationship between its business |
| Diversification Strategy | used to increase the firms value by improving its overall performance |
| Economies of Scope | are cost savings that the firm creates by successfully sharing some of its resources and capabilities or transferring one or more corporate-level core competencies that were developed in one of its businesses to another of its businesses. |
| Resource Intangibility | are difficult for competitors to understand and imitate |
| Market Power | exists when firm is able to sell its products above the existing competitive level or to reduce the costs of its primary and support activities below the competitive level, or both. |
| Multipoint Competition | exists hen two or more diversified firms simultaneously compete in the same product areas or geographical markets |
| Vertical Integration | exists when a company produces its own inputs (backward integration) or owns its own source of output distribution (forward integration). |
| De-integration | is the focus of most manufacturing firms, developing independent supplier markets |
| Virtual integration | common source of market power, allows firms to reduce costs of processing transactions while improving supply chain management skills and tightening control of inventories |
| Restructuring of Acquired Assets | diversified firm buys another company, restructures that company's assets in ways that allow it to operate more profitability and then sells company for a profit in external market |
| Cellar-Kefauver Antimerger Act (1950( | discouraged horizontal and vertical mergers |
| Synergy | exists when the value created by business units working together exceeds the value that those same units create working independently |
| International Strategy | strategy through which the firm sells its goods or services outside its domestic market |
| Benefits of using International Strategies | increase market size, greater return on major capital investment in new products and processes, greater economies of scale, scope, and learning, a competitive advantage through location |
| Reverse engineering | competitors disassemble a product, learn the new technology, and develop a similar product |
| Multidomestic Strategy | is an international strategy in which strategic and operating decisions are decentralized to the strategic business unit in each country so as to allow that unit to tailor products to the local market |
| Global Strategy | assumes more standardization of products across country markets. centralized and controlled by home office |
| Transnational Strategy | is an international strategy through which the firm seeks to achieve both global efficiency and local responsiveness |
| Flexible Coordination | building a shared vision and individual commitment through an integrated network |
| Regionalization | firms location can affect its strategic competitiveness. must decide to compete in all/ or many global markets, or focus on particular region |
| International Expansion | accomplished by exporting products, participating in licensing arrangements, forming strategic alliances, making acquisitions and establishing new wholly owned subsidiary |
| Exporting | doesn't require the penes of establishing operations in the host countries. must establish some means of marketing and distribution. |
| Licensing | common form of organizational network, small firms arrangement allows a foreign company to purchase the right to manufacture and sell firms products within host country |
| Strategic Alliance | popular means of international expansion. allows firms to share the risks and the resources required to enter international market. It can facilitate the development of new core competencies that contribute to the firm's future strategic competitiveness |
| Merger | is a strategy through which two firms agree to integrate their operations on a relatively coequal basis |
| Acquisition | one firm buys a controlling, or 100% , interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio |
| Takeover | a special type of acquisition wherein the target firm does not solicit the acquiring firm's bid |
| Horizontal Acquisition | acquisition of a company competing in the same industry as the acquiring firm, |
| Vertical Acquisition | refers to a firm acquiring a supplier or distributor of one or more of its goods/services |
| Related Acquisition | acquiring a firm in a highly related industry. firm seek ti create value through the synergy that can be generated by integrating some of their resources and capabilities |
| Barriers to Entry | are factors associated with market or with the firms currently operating in it that increase the expense and difficulty new firms encounter when trying to enter that particular market |
| Cross-Border Acquisitions | acquisitions mande between companies with headquarters in different countries |
| Due Diligence | is a process through which a potential acquirer evaluates a target firm for acquisition |
| Junk Bonds | are a financing option through which risky acquisitions are financed with money (debt) that provides a large potential return to lenders (bondholders) |
| Private Synergy | created when combining and integrating the acquiring firms' assets yield capabilities and core competencies that could not be developed by combining and integrating either firm's assets with another company. |
| Transaction Costs | expenses are incurred when firms use acquisition strategies to create synergy. Can be direct or indirect |
| Bureaucratic Controls | are formalized supervisory and behavioral rules and policies designed to ensure consistency of decisions and actions across different units of a firm. |
| Restructuring | strategy which a firm changes its set of business or it's financial structure. Firms focus on fewer number of products and markets |
| Downsizing | a reduction in number of firms employees and sometimes in the number of its operating units |
| Downscoping | divesture, spin-off, or some other mess of eliminating businesses that are unrelated to a firm's core business. |
| Leveraged Buyout | a party buys all of a firms assets in order to the firm private |
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