The new owners of a long established clothing retailer have experience in garment manufacturing and as a result they decide to expand into that business. this type of business growth is called
backward vertical integration
what is a sign that a leading firm may be vulnerable to an offensive strategy attack?
the firms use of ageing technology and outdated equipment
if the face to market leadership in a particular industry is a marathon
there may be enough time for fast followers and late movers
What are common objectives of merger and acquisition strategies?
-Expanding geographic coverage-Extending business into new product categories -gaining quick access to new technologies
In a strategic alliance, a company's proprietary knowledge and trade secrets are most vulnerable when the partnership involves
collaborative research and development
what are reasons for a company to favor internet retailing?
- To increase brand recognition -To lower costs for end users -To lower distribution costs
which statement about strategic alliances in industries experiencing rapid technological advances is true?
Many companies find strategic alliances an essential way to keep pace with technological change
In industries with changing boundaries, a company may pursue an acquisition strategy in order to
- Be prepared t orespond to the various directions the industry might take-Become mroe flexible in its capacity to respond to buyers' changing needs -Expand into new geographic regions
A strategic alliance can be defined as a formal; agreement between two or more separate companies in which
the parties agree to work collaboratively toward one strategically relevant objective
what are some of the negative effects that merger and acquisitions can have on personnel
-Difficulty coping with new management may lead to lower morale-Employees may resist efforts to mesh the cultures of the two companies -managers may make mistakes when deciding which systems to integrate
A company that aggressively pursues and online sales strategy risks
-threatening crucial relationships with distribution allies
The best strategic offensives for companies involve which of the following?
-Strive to convert a competitive advantage into a sustainable advantage
the term "blue ocean" refers to a market space in which
an industry does not yet exists and the market space is untainted by competition
outsourcing typically ____ the scope of a business operations
which statements are true about concerning horizontal scope?
-It can be expanded through company mergers and acquisitions
what are reasons that merger and acquisitions sometimes fail?
- cost savings are less than anticipated
T?F
Expanding along the value chain into products and services that are closer to the end user is called
forward vertical integration
The drawbacks of strategic alliances include the possibility that a company will
-Overestimate the potential for sustaining a positive relationship-Accidentally receal knowledge that allows a pernter to match core strengths -Become too dependent on a partner
which statement are true concerning vertical scope?
- It is defined by the range of activities that may extend from initial production to after- sale customer service.
when should a company undertake a strategic offensive?
-When the company has no option other than to try to lessen a strong rivals competitive advantage
Which statements about strategic alliances are generally true?
-All parties of the alliance contribute resources-Financial responsibility is shared among all parties of the alliance -The alliances involve mutual dependence and shared risk
which statements concerning strategic alliances are accurate?
-Strategic alliances are used by companies as a way of managing outsourcing
Which statements about strategic alliances among large corporations is true?
-Large coporations can be well-served by managing their strategic alliance like a profolio
A business guerrilla offensive is best suited for
small companies that lack the capacity to launch a full strategic offensive against better established rivals
Strategic alliances can be a viable alternative to
-Horizontal mergers and acquisitions-Vertical integration strategies -Traditional price-oriented contracts
what are recommended strategies for companies that manage a large number of strategic alliances?
-To break relationships that have produced meager results-To continue to seek promising new alliances -To restructure alliances to optimize collaborative effort
the benefits of forward vertical integration include
- Differentiating a company from its competitors -Giving manufacturers better access to end users -Improving a companys market visablility
In some cases, backward vertical integration can increase efficiency by
coordinating production flows and preventing bottlenecks
Approximately what percent of a strategic business alliances fail each year?
which statement about entering the supply stage of the value chain as part of a vertical integration strategy is true?
matching a suppliers production efficiency often requires significant investment in research and development
Zipcar located new ares of demand for rented cars by targeting
people who live in urban centers and need short term rentals
what would be an example of a firm pursuing vertical integration?
the owner of a poultry farm expanding into food distrisbution
In many cases, strategic alliances are preferable to vertical integration strategies , as well as horizontal mergers and aquisitions, because strategic alliances
- Are more flexible and allow for swifter responses to changing market conditions-can be deployed more rapidly in attempt to gain first-mover advantages -Can lower investment costs by requiring partners to pool resources
Companies in successful business alliances understand that collaborative arrangements should be
-Capable of responding to shifting market changes
Some companies have adopted forward vertical integration strategies to
-Supplement to their core product line with iconography and memorabilia -Facilitate the sale of overstocked and slow moving items -Decrease dependence on sales agents, wholesalers and retailers
The defective approach that companies use most frequently to defend their market position is
to block avenues that competitors might use to launch a strategic offensive
A company that acquires another comapny in the same industry may be able to cut costs by
-Combining and downsizing administrative activities
Contract-based outsourcing can introduce problems because
- Issues arising from delays and budget overruns may be difficult to resolve-The outside company may lack incentive to meet the needs of the outsourcing company -A company may have a difficult time monitoring the work of the outside company
in a winner take all type of market
first mover advantages can insulate a company from competition
Which statement about establishing the technical standard in an industry is true?
Establishing a technical standard is an experience based advantage that can grow over time
which statements concerning strategic alliances are accurate?
-Strategic alliances are used by some companies to extend their scope of operations internationally
In a strategic alliance between companies, the decision making process should
-allow partners to keep pace with developments in the market
Vertically integrated companies may face challenges realizing economies of scale because
- Their production levels often fall below the minimum efficient scale
Comapnies that outsource strategically important run the risk of
weakening their ability to sustain their competitive advantage in ares vital to the company's success
In which situation do adept followers have an advantage over first movers?
-When first movers products do not perform well-When imitators can achieve the same benefits as pioneers with lower costs -When market uncertainties make it difficult to predict which products will succeed.
A merger can be defined as
the combining of two or more companies into a single corporate entity
A company that expands its geographic coverage typically
-enhances its name recognition and brand awareness
Price cutting can be an effective strategy for companies that
have already achieved a cost advantage
what are examples of ways that companies signal would be challengers that retaliation is likely ?
-publicly announcing a commitment to maintaining market share
combinded companies may be able to reduce supply chain costs because
expanded operating capacity may increase the companys bargaining power with suppliers
A merger or acquisition that extends business into new product categories
- helps a company fill gaps in its product line
when buyer preferences shift a vertically integrated company
may have difficulty adjusting its product lines to meet new demand
A company can achieve which of the following by signaling would be business challengers that retalliation is likely in the event of any strategic attack?
-Diverting challengers to less threatening competition
Zipcar competes against entrenched rivals in the rental car insdustry by
-Keeping the cars it rents in conventialty located parking spaces
Under which of the following circumstances might backward vertical integration lower costs?
-When there are few suppliers in the market
A company that acquires another company in the same industry may be able to cut costs by
-Combining and downsizing administrative activities
When there are improvements in technology at the supply stage of the value chain, a vertically integrated company
-May need to continue producing suboptimal products rather than upgrading its technology
A vertically integrated firm
Participates in multiple stages of an industry value chain system
first-movers are likely to experience significant advantages when
-Switching costs discourage a first movers customers from seeking a different vendor |
What are examples of ways that companies signal would-be challengers that retaliation is likely?
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