Globus Test 3 100% Solved 2024

Globus Test 3 100% Solved 2024 Corporate Strategy - Answer- the decisions that senior management makes and the goal-directed actions it takes to gain and sustain competitive advantage in several industries and markets simultaneously -vertical integration: industry value chain describes the transformation of raw materials into finished goods and services along distinct vertical changes -diversification: what range of products and services should the company offer? -geographic scope: where should the company compete geographically in terms of regional, national, or international markets? Why firms need to grow? - Answer- 1. increase profits 2. lower costs 3. increase market power 4. reduce risk 5. motivate management transaction cost economics - Answer- a theoretical framework in strategic management to explain and predict the boundaries of the firm, which is central to formulating a corporate strategy that is more likely to lead to competitive advantage transaction costs - Answer- all internal and external costs associated with an economic exchange, whether within a firm or in markets external transaction costs - Answer- costs of searching for a firm or an individual with whom to contract, and then negotiating, monitoring, and enforcing the contract internal transaction costs - Answer- costs pertaining to organizing an economic exchange within a hierarchy; also called administrative costs Backward vertical integration - Answer- changes in an industry value chain that involve moving ownership of activities upstream to the originating (inputs) point of the value chain Forward vertical integration - Answer- changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain Benefits of Vertical Integration - Answer- -lowering costs -improving quality -facilitating scheduling and planning -facilitating investments in specialized assets -securing critical supplies and distribution channels Risks of Vertical Integration - Answer- increasing costs, reducing quality, reducing flexibility, increasing the potential for legal repercussions taper integration - Answer- a way of orchestrating value activities in which a firm is backwardly integrated but also relies on outside market firms for some of its supplies, and/or is forwardly integrated but also relies on outside market firms for some of its distribution strategic outsourcing - Answer- moving one or more internal value chain activities outside the firm's boundaries to other firms in the industry value chain 4 main types of business diversification - Answer- single business: low level of diversification. derives more than 95 percent of its revenues from 1 business. dominant business: derive between 70-95 percent of its revenues from a single business but it peruses at least one other business activity related diversification: corporate strategy in which a firm derives less than 70 percent of its revenues from a single business activity and obtains revenues from other lines of business that are linked to the primary business activity unrelated diversification: aka the conglomerate: derives less than 70 percent of its revenues from a single business and there are few, if any, linkages among its business. conglomerate - Answer- a company that combines two or more strategic business units under one overarching corporation; follows an unrelated diversification strategy related constrained diversification strategy - Answer- a kind of related diversification strategy in which executives pursue only businesses where they can apply the resources and core competencies already available in the primary business related linked diversification strategy - Answer- a kind of related diversification strategy in which executives pursue various businesses opportunities that share only a limited number of linkages core competence-market matrix - Answer- a framework to guide corporate diversification strategy by analyzing possible combinations of existing/new core competencies and existing/new markets Question Mark (top left): combines new competencies with existing market opportunities. Managers must come up with strategic initiatives of how to build new core competencies to protect and extend the firm's the firm's current market position. Star (top right): combines new core competencies with new market opportunities. The most challenging diversification strategy because it requires building new core competencies to create and compete in future markets Dog (bottom left): combines existing core competencies with existing markets. Here, managers need to come up with idea of how to leverage existing core competencies to improve their current market position