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Lernmaterialien für Applied Strategy and Organizations an der TU München

Greife auf kostenlose Karteikarten, Zusammenfassungen, Übungsaufgaben und Altklausuren für deinen Applied Strategy and Organizations Kurs an der TU München zu.

TESTE DEIN WISSEN

Market Penetration 

Definition and Constraints 

(Corporate Strategy Directions)

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TESTE DEIN WISSEN

→ increasing share of current markets with the current product range

 

Constraints:

 

Retaliation from competitors

  • market penetration  increases industry rivalry as other competitors in the market defend their share (danger higher in low-growth markets)
    → may cost more than any market-share gains are actually worth

 

Legal constraints

  • market penetration can raise concerns from official competition regulators concerning excessive market power
Lösung ausblenden
TESTE DEIN WISSEN

Retrenchment


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TESTE DEIN WISSEN

→ withdrawal from marginal activities in order to concentrate on the most valuable segments and products within existing business

Lösung ausblenden
TESTE DEIN WISSEN

Product Development 

Definition and Risks

(Corporate Strategy Directions)

Lösung anzeigen
TESTE DEIN WISSEN

→ deliver modified / new products (or services) to existing markets

 

Risks:

 

New strategic capabilities

  • new processes or technologies that are unfamiliar to the organisation

 

Project management risk

  • delays and increased costs due to project complexity 
  • changing project specifications over time
Lösung ausblenden
TESTE DEIN WISSEN

Market Development Definition and Basic Forms

(Corporate Strategy Directions)

Lösung anzeigen
TESTE DEIN WISSEN

→ offering existing products to new market

 

Basic forms:

 

New users

  • e.g. aluminium: original users packaging manufacturers, new users aerospace industry

 

New geographies 

  • e.g. internationalisation
Lösung ausblenden
TESTE DEIN WISSEN

Value-destroying Drivers for Diversification


Lösung anzeigen
TESTE DEIN WISSEN

- Responding to market decline

 

- Spreading risk across a range of markets

 

- Managerial ambition

  • managers going beyond their areas of true expertise
Lösung ausblenden
TESTE DEIN WISSEN

Vertical Integration Definition


Lösung anzeigen
TESTE DEIN WISSEN

→ entering activities where the organisation is its own supplier or customer

 

Backward integration

  • development into activities concerned with the inputs into the company’s current business
  • e.g. car manufacturer acquires supplier

 

Forward integration

  • development into activities concerned with the outputs of a company’s current business
  • e.g. car manufacturer enters into car retail, repairs and servicing
Lösung ausblenden
TESTE DEIN WISSEN

Outsourcing Definition


Lösung anzeigen
TESTE DEIN WISSEN

→ process by which activities previously carried out internally are subcontracted to external suppliers

 

Decision based on:


- Relative strategic capabilities

  • is the subcontractor better?


- Risk of opportunism

  • will the subcontractor take advantage of the relationship over time?
Lösung ausblenden
TESTE DEIN WISSEN

Value-adding Activities 

of Corporate Parents


Lösung anzeigen
TESTE DEIN WISSEN

Envisioning

  • provide a clear overall vision or strategic intent for its business units

 

Facilitating synergies

  • facilitate cooperation and sharing across business units

 

Coaching

  • develop strategic capabilities by coaching managers from business units

 

Providing central services and resources

  • provide capital for investments 
  • provide central services (treasury, tax, HR)

 

Intervening

  • intervene to ensure appropriate performance
Lösung ausblenden
TESTE DEIN WISSEN

Value-destroying Activities 

of Corporate Parents


Lösung anzeigen
TESTE DEIN WISSEN

Adding management cost

  • actual businesses have to generate the revenues that pay for corporate centres → only beneficial if corporate centre costs are lower than the value the business units create

 

Adding bureaucratic complexity

  • additional layer of management and the need to coordinate with sister businesses

 

Obscuring financial performance

  • under-performance of weak businesses can be obscured
  • weak businesses might be cross-subsidised by stronger ones
Lösung ausblenden
TESTE DEIN WISSEN

Challenges of Synergies


Lösung anzeigen
TESTE DEIN WISSEN

Excessive costs 

  • managing synergistic relationships is costly

 

Overcoming self-interest

  • managers might be unwilling to sacrifice their time and resources for the common good

 

Illusory synergies 

  • easy to overestimate the value of skills or resources to other businesses
Lösung ausblenden
TESTE DEIN WISSEN

Problems with the BCG (Growth / Share) Matrix

Lösung anzeigen
TESTE DEIN WISSEN

Definitional vagueness 

  • hard to decide what high / low growth or share mean in particular situations

 

Capital market assumptions

  • notion that a corporate parent needs a balanced portfolio to finance investment from internal sources (cash cows)
    → assumes that capital cannot be raised in external markets

 

Unkind to animals 

  • cash cows being milked 
  • dogs being cast out of the organization
    → motivation problems!

 

Ignores commercial linkages 

  • assumes that there are no commercial ties to other business units in the portfolio
Lösung ausblenden
TESTE DEIN WISSEN

Diversification /

Related Diversification /

Conglomerate Diversification

Definition

Lösung anzeigen
TESTE DEIN WISSEN

Diversification

→  increasing the range of products or markets served by an organisation

→ also described as horizontal integration

 

Related diversification

→ expanding into products or services with relationships to existing business

→ also described as vertical integration

 

Conglomerate (unrelated) diversification

→ diversifying into products or services with no relationships to existing businesses

Lösung ausblenden
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Q:

Market Penetration 

Definition and Constraints 

(Corporate Strategy Directions)

A:

→ increasing share of current markets with the current product range

 

Constraints:

 

Retaliation from competitors

  • market penetration  increases industry rivalry as other competitors in the market defend their share (danger higher in low-growth markets)
    → may cost more than any market-share gains are actually worth

 

Legal constraints

  • market penetration can raise concerns from official competition regulators concerning excessive market power
Q:

Retrenchment


A:

→ withdrawal from marginal activities in order to concentrate on the most valuable segments and products within existing business

Q:

Product Development 

Definition and Risks

(Corporate Strategy Directions)

A:

→ deliver modified / new products (or services) to existing markets

 

Risks:

 

New strategic capabilities

  • new processes or technologies that are unfamiliar to the organisation

 

Project management risk

  • delays and increased costs due to project complexity 
  • changing project specifications over time
Q:

Market Development Definition and Basic Forms

(Corporate Strategy Directions)

A:

→ offering existing products to new market

 

Basic forms:

 

New users

  • e.g. aluminium: original users packaging manufacturers, new users aerospace industry

 

New geographies 

  • e.g. internationalisation
Q:

Value-destroying Drivers for Diversification


A:

- Responding to market decline

 

- Spreading risk across a range of markets

 

- Managerial ambition

  • managers going beyond their areas of true expertise
Mehr Karteikarten anzeigen
Q:

Vertical Integration Definition


A:

→ entering activities where the organisation is its own supplier or customer

 

Backward integration

  • development into activities concerned with the inputs into the company’s current business
  • e.g. car manufacturer acquires supplier

 

Forward integration

  • development into activities concerned with the outputs of a company’s current business
  • e.g. car manufacturer enters into car retail, repairs and servicing
Q:

Outsourcing Definition


A:

→ process by which activities previously carried out internally are subcontracted to external suppliers

 

Decision based on:


- Relative strategic capabilities

  • is the subcontractor better?


- Risk of opportunism

  • will the subcontractor take advantage of the relationship over time?
Q:

Value-adding Activities 

of Corporate Parents


A:

Envisioning

  • provide a clear overall vision or strategic intent for its business units

 

Facilitating synergies

  • facilitate cooperation and sharing across business units

 

Coaching

  • develop strategic capabilities by coaching managers from business units

 

Providing central services and resources

  • provide capital for investments 
  • provide central services (treasury, tax, HR)

 

Intervening

  • intervene to ensure appropriate performance
Q:

Value-destroying Activities 

of Corporate Parents


A:

Adding management cost

  • actual businesses have to generate the revenues that pay for corporate centres → only beneficial if corporate centre costs are lower than the value the business units create

 

Adding bureaucratic complexity

  • additional layer of management and the need to coordinate with sister businesses

 

Obscuring financial performance

  • under-performance of weak businesses can be obscured
  • weak businesses might be cross-subsidised by stronger ones
Q:

Challenges of Synergies


A:

Excessive costs 

  • managing synergistic relationships is costly

 

Overcoming self-interest

  • managers might be unwilling to sacrifice their time and resources for the common good

 

Illusory synergies 

  • easy to overestimate the value of skills or resources to other businesses
Q:

Problems with the BCG (Growth / Share) Matrix

A:

Definitional vagueness 

  • hard to decide what high / low growth or share mean in particular situations

 

Capital market assumptions

  • notion that a corporate parent needs a balanced portfolio to finance investment from internal sources (cash cows)
    → assumes that capital cannot be raised in external markets

 

Unkind to animals 

  • cash cows being milked 
  • dogs being cast out of the organization
    → motivation problems!

 

Ignores commercial linkages 

  • assumes that there are no commercial ties to other business units in the portfolio
Q:

Diversification /

Related Diversification /

Conglomerate Diversification

Definition

A:

Diversification

→  increasing the range of products or markets served by an organisation

→ also described as horizontal integration

 

Related diversification

→ expanding into products or services with relationships to existing business

→ also described as vertical integration

 

Conglomerate (unrelated) diversification

→ diversifying into products or services with no relationships to existing businesses

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