MNGT 4800 exam 3 with accurate detailed ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
solutions
business strategy concerns the question of... - correct answer✔✔how to compete in a single
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
product market ||//\\||
firms pursue competitive advantages through... - correct answer✔✔either a
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
DIFFERENTIATION or COST-LEADER generic strategy ||//\\|| ||//\\|| ||//\\|| ||//\\||
as firms grow, they are frequently expanding their business activities through seeking out
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
new markets by: - correct answer✔✔- offering new products and/or services
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- competing in different geographic regions
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
in response, managers must formulate a... - correct answer✔✔corporate strategy
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- addresses the question "where do we compete?"
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
concentration strategies - correct answer✔✔refer to actions firms use to compete in a ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
SINGLE INDUSTRY ||//\\||
3 types of concentration strategies - correct answer✔✔1. market penetration
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
2. market development
||//\\|| ||//\\||
3. product development
||//\\|| ||//\\||
- firms can use one or any combination of these strategies to grow within an industry
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
market penetration - correct answer✔✔involves an attempt to gain additional market share
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
in an EXISTING MARKET using EXISTING PRODUCTS
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
,- typically involves aggressive advertising to attract new customers in existing markets
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
market development - correct answer✔✔involves attempting to sell EXISTING PRODUCTS in
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
NEW MARKETS ||//\\||
- entering a new retail channel
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- entering a new geographic region
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
product development - correct answer✔✔refers to the creation of NEW PRODUCTS to serve
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
EXISTING MARKETS ||//\\||
- e.g. McDonald's has introduced several new lines of products including coffee and
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
smoothies and healthy options ||//\\|| ||//\\|| ||//\\||
horizontal integration - correct answer✔✔refers to an attempt to expand a firm's presence in ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
an industry by acquiring or merging with a rival
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
acquisition - correct answer✔✔describes the purchase or takeover of one company by ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
another
- can be friendly or unfriendly--also called a HOSTILE TAKEOVER
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- the acquiring firm tends to be larger than the target firm
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
merger - correct answer✔✔describes the joining of two independent companies to form a
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
COMBINED ENTITY ||//\\||
- tend to be friendly; the target firm tends to welcome the merger
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- stock from one firm is typically exchanged 1:1 for stock in new firm
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- firms tend to be similar in size
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
industry consolidation - correct answer✔✔waves of horizontal integration lead to industry
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
consolidation
, - e.g. the pharmaceutical industry has seen considerable consolidation in the late 2000s
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
advantages of horizontal integration (sources of value creation) - correct answer✔✔-
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
reduction in competitive intensity ||//\\|| ||//\\|| ||//\\||
- positively affects several Porter's forces
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- lower costs
||//\\|| ||//\\||
- increased differentiation
||//\\|| ||//\\||
reduction in competitive intensity - correct answer✔✔as the industry approaches an
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
oligopolistic structure, surviving firms focus less on price competition, possibly increasing
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
profitability
- e.g. recent mergers in the airline industry have stabilized prices and competition
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
positively affects several Porter's forces - correct answer✔✔- increases power of buyers and
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
suppliers
- reduces the threat of firm entry
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- reduces rivalry among existing competitors
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
lower costs - correct answer✔✔firms are able to lower costs through increased economies of
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
scale
||//\\||
- e.g. mergers among drug manufacturers allows firms to sell greater variety of drugs using
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
the same sales force, reducing costs and increasing profits
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
increased differentiation - correct answer✔✔can help firms fill gaps in their product and
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
service offerings ||//\\||
disadvantages of horizontal integration - correct answer✔✔- integration failure ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- reduced flexibility
||//\\|| ||//\\||
solutions
business strategy concerns the question of... - correct answer✔✔how to compete in a single
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
product market ||//\\||
firms pursue competitive advantages through... - correct answer✔✔either a
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
DIFFERENTIATION or COST-LEADER generic strategy ||//\\|| ||//\\|| ||//\\|| ||//\\||
as firms grow, they are frequently expanding their business activities through seeking out
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
new markets by: - correct answer✔✔- offering new products and/or services
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- competing in different geographic regions
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
in response, managers must formulate a... - correct answer✔✔corporate strategy
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- addresses the question "where do we compete?"
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
concentration strategies - correct answer✔✔refer to actions firms use to compete in a ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
SINGLE INDUSTRY ||//\\||
3 types of concentration strategies - correct answer✔✔1. market penetration
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
2. market development
||//\\|| ||//\\||
3. product development
||//\\|| ||//\\||
- firms can use one or any combination of these strategies to grow within an industry
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
market penetration - correct answer✔✔involves an attempt to gain additional market share
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
in an EXISTING MARKET using EXISTING PRODUCTS
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
,- typically involves aggressive advertising to attract new customers in existing markets
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
market development - correct answer✔✔involves attempting to sell EXISTING PRODUCTS in
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
NEW MARKETS ||//\\||
- entering a new retail channel
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- entering a new geographic region
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
product development - correct answer✔✔refers to the creation of NEW PRODUCTS to serve
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
EXISTING MARKETS ||//\\||
- e.g. McDonald's has introduced several new lines of products including coffee and
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
smoothies and healthy options ||//\\|| ||//\\|| ||//\\||
horizontal integration - correct answer✔✔refers to an attempt to expand a firm's presence in ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
an industry by acquiring or merging with a rival
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
acquisition - correct answer✔✔describes the purchase or takeover of one company by ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
another
- can be friendly or unfriendly--also called a HOSTILE TAKEOVER
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- the acquiring firm tends to be larger than the target firm
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
merger - correct answer✔✔describes the joining of two independent companies to form a
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
COMBINED ENTITY ||//\\||
- tend to be friendly; the target firm tends to welcome the merger
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- stock from one firm is typically exchanged 1:1 for stock in new firm
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- firms tend to be similar in size
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
industry consolidation - correct answer✔✔waves of horizontal integration lead to industry
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
consolidation
, - e.g. the pharmaceutical industry has seen considerable consolidation in the late 2000s
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
advantages of horizontal integration (sources of value creation) - correct answer✔✔-
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
reduction in competitive intensity ||//\\|| ||//\\|| ||//\\||
- positively affects several Porter's forces
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- lower costs
||//\\|| ||//\\||
- increased differentiation
||//\\|| ||//\\||
reduction in competitive intensity - correct answer✔✔as the industry approaches an
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
oligopolistic structure, surviving firms focus less on price competition, possibly increasing
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
profitability
- e.g. recent mergers in the airline industry have stabilized prices and competition
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
positively affects several Porter's forces - correct answer✔✔- increases power of buyers and
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
suppliers
- reduces the threat of firm entry
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- reduces rivalry among existing competitors
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
lower costs - correct answer✔✔firms are able to lower costs through increased economies of
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
scale
||//\\||
- e.g. mergers among drug manufacturers allows firms to sell greater variety of drugs using
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
the same sales force, reducing costs and increasing profits
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
increased differentiation - correct answer✔✔can help firms fill gaps in their product and
||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
service offerings ||//\\||
disadvantages of horizontal integration - correct answer✔✔- integration failure ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
- reduced flexibility
||//\\|| ||//\\||
