Changes in an industry value chain that involve moving ownership of activi
backward vertical integration
upstream to the originating (inputs) point of the value chain.
A corporate planning tool in which the corporation is viewed as a portfolio
business units, which are represented graphically along relative market sha
Boston Consulting Group (BCG) growth-
(horizontal axis) and speed of market growth (vertical axis). SBUs are plotte
share matrix
into four categories (dog, cash cow, star, and question mark), each of whic
warrants a different investment strategy.
A company that combines two or more strategic business units under one
conglomerate
overarching corporation; follows an unrelated diversification strategy.
A framework to guide corporate diversification strategy by analyzing poss
core competence-market matrix
combinations of existing/new core competencies and existing/new market
The decisions that senior management makes and the goal-directed action
corporate strategy takes to gain and sustain competitive advantage in several industries and
markets simultaneously.
credible commitment A long-term strategic decision that is both difficult and costly to reverse.
An increase in the variety of products and services a firm offers or markets
diversification
the geographic regions in which it competes.
Situation in which the stock price of highly diversified firms is valued at less
diversification discount
the sum of their individual business units.
, Situation in which the stock price of related-diversification firms is valued a
diversification premium
greater than the sum of their individual business units.
Costs of searching for a firm or an individual with whom to contract, and th
external transaction costs
negotiating, monitoring, and enforcing the contract.
Changes in an industry value chain that involve moving ownership of activi
forward vertical integration
closer to the end (customer) point of the value chain.
A long-term contract in which a franchisor grants a franchisee the right to u
franchising the franchisor's trademark and business processes to offer goods and serv
that carry the franchisor's brand name.
geographic diversification strategy Corporate strategy in which a firm is active in several different countries.
Occurs when it is mutually beneficial for two parties to cooperate, but one
hold-up problem party may withhold cooperation because it does not want to give the othe
party increased bargaining power.
Depiction of the transformation of raw materials into finished goods and
industry value chain services along distinct vertical stages, each of which typically represents a
distinct industry in which a number of different firms are competing.
Situation in which one party possesses private information and is therefore
information asymmetry
more informed than another party.
backward vertical integration
upstream to the originating (inputs) point of the value chain.
A corporate planning tool in which the corporation is viewed as a portfolio
business units, which are represented graphically along relative market sha
Boston Consulting Group (BCG) growth-
(horizontal axis) and speed of market growth (vertical axis). SBUs are plotte
share matrix
into four categories (dog, cash cow, star, and question mark), each of whic
warrants a different investment strategy.
A company that combines two or more strategic business units under one
conglomerate
overarching corporation; follows an unrelated diversification strategy.
A framework to guide corporate diversification strategy by analyzing poss
core competence-market matrix
combinations of existing/new core competencies and existing/new market
The decisions that senior management makes and the goal-directed action
corporate strategy takes to gain and sustain competitive advantage in several industries and
markets simultaneously.
credible commitment A long-term strategic decision that is both difficult and costly to reverse.
An increase in the variety of products and services a firm offers or markets
diversification
the geographic regions in which it competes.
Situation in which the stock price of highly diversified firms is valued at less
diversification discount
the sum of their individual business units.
, Situation in which the stock price of related-diversification firms is valued a
diversification premium
greater than the sum of their individual business units.
Costs of searching for a firm or an individual with whom to contract, and th
external transaction costs
negotiating, monitoring, and enforcing the contract.
Changes in an industry value chain that involve moving ownership of activi
forward vertical integration
closer to the end (customer) point of the value chain.
A long-term contract in which a franchisor grants a franchisee the right to u
franchising the franchisor's trademark and business processes to offer goods and serv
that carry the franchisor's brand name.
geographic diversification strategy Corporate strategy in which a firm is active in several different countries.
Occurs when it is mutually beneficial for two parties to cooperate, but one
hold-up problem party may withhold cooperation because it does not want to give the othe
party increased bargaining power.
Depiction of the transformation of raw materials into finished goods and
industry value chain services along distinct vertical stages, each of which typically represents a
distinct industry in which a number of different firms are competing.
Situation in which one party possesses private information and is therefore
information asymmetry
more informed than another party.
