Podcast
Questions and Answers
What is one reason an organization might choose to implement a retrenchment strategy?
What is one reason an organization might choose to implement a retrenchment strategy?
- To increase market share rapidly
- To expand into new geographic territories
- To enhance product development initiatives
- To address a deficit from previous years (correct)
When is it appropriate for a company to employ more than one strategy simultaneously?
When is it appropriate for a company to employ more than one strategy simultaneously?
- When the organization has several strong products
- When the performance level is significantly below past achievements (correct)
- When the company's growth is stagnating
- When the company intends to diversify its product line
Which situation would prompt an organization to retrench certain products or services?
Which situation would prompt an organization to retrench certain products or services?
- To comply with statutory bans on certain services (correct)
- To expand its operations into new markets
- To improve customer loyalty for existing offerings
- To develop a completely new product line
What is an outcome of employing an expansion strategy?
What is an outcome of employing an expansion strategy?
Which of the following strategies is NOT typically associated with a firm's recovery from poor performance?
Which of the following strategies is NOT typically associated with a firm's recovery from poor performance?
What is concentration strategy primarily focused on?
What is concentration strategy primarily focused on?
Which of the following is NOT considered a concentration strategy?
Which of the following is NOT considered a concentration strategy?
How is an expansion strategy characterized?
How is an expansion strategy characterized?
What does the term 'co-opetition' refer to?
What does the term 'co-opetition' refer to?
Which strategy aims at a major increase in pace within a firm’s current business?
Which strategy aims at a major increase in pace within a firm’s current business?
What is a characteristic of internationalization strategies?
What is a characteristic of internationalization strategies?
What best defines the term 'integration' in the context of corporate strategy?
What best defines the term 'integration' in the context of corporate strategy?
Which of the following strategies is focused on enhancing existing products within defined markets?
Which of the following strategies is focused on enhancing existing products within defined markets?
What is the primary objective of a stability strategy?
What is the primary objective of a stability strategy?
Which strategy is followed when an enterprise seeks to implement higher growth gradually?
Which strategy is followed when an enterprise seeks to implement higher growth gradually?
Which of the following is NOT one of the ways a company can adopt an expansion strategy?
Which of the following is NOT one of the ways a company can adopt an expansion strategy?
What does a pause strategy allow an enterprise to do?
What does a pause strategy allow an enterprise to do?
Which of the following best describes a profit strategy?
Which of the following best describes a profit strategy?
Which of these strategies focuses on improving operational efficiency?
Which of these strategies focuses on improving operational efficiency?
In which situation would a firm likely implement a retrenchment strategy?
In which situation would a firm likely implement a retrenchment strategy?
What is the primary focus of a corporate-level strategy?
What is the primary focus of a corporate-level strategy?
What type of corporate-level strategy is used when a company seeks incremental improvements?
What type of corporate-level strategy is used when a company seeks incremental improvements?
What is a primary characteristic of the combination strategy?
What is a primary characteristic of the combination strategy?
In which situation would an organization implement a corporate-level strategy?
In which situation would an organization implement a corporate-level strategy?
Which of the following is NOT a characteristic of a corporate-level strategy?
Which of the following is NOT a characteristic of a corporate-level strategy?
What can a corporate-level strategy indicate about a company?
What can a corporate-level strategy indicate about a company?
Which sub-strategy is identified as focusing on one product or service line?
Which sub-strategy is identified as focusing on one product or service line?
In the context of corporate-level strategies, what does the term 'functional performance' refer to?
In the context of corporate-level strategies, what does the term 'functional performance' refer to?
What might be a reason for a company to choose a stability strategy?
What might be a reason for a company to choose a stability strategy?
What does a value chain primarily consist of?
What does a value chain primarily consist of?
What is the primary aim of a diversification strategy?
What is the primary aim of a diversification strategy?
What does retrenchment strategy primarily seek to achieve?
What does retrenchment strategy primarily seek to achieve?
Which of the following best defines a combination strategy?
Which of the following best defines a combination strategy?
What is the primary activity involved in the evaluation for international market entry?
What is the primary activity involved in the evaluation for international market entry?
Which of the following best describes the nature of diversification as a strategy?
Which of the following best describes the nature of diversification as a strategy?
In the context of a value chain, which activity occurs last?
In the context of a value chain, which activity occurs last?
What approach does retrenchment strategy take when faced with declining sales?
What approach does retrenchment strategy take when faced with declining sales?
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Study Notes
Corporate-Level Strategy
- A corporate-level strategy is a multi-tiered company plan that leaders use to define, outline, and achieve specific business goals.
Types of Corporate-Level Strategies
- Stability Strategy: Aims at incremental improvement of functional performance with few changes to customer groups, functions, or technologies.
- Expansion Strategy: Seeks to increase the pace of activity within the company's present business definition, potentially by adding new products, services, markets, or functions.
- Retrenchment Strategy: Seeks to reduce the size or diversity of organizational operations, often in response to declining sales and profits.
- Combination Strategy: Incorporates elements of expansion, stability, or retrenchment strategies, either simultaneously across different businesses or at different times within the same business.
Stability Strategy
- Incremental Growth Strategy: Focuses on a single product or service line and grows slowly by entering new territories or adding new product lines.
- Profit Strategy: Aims to generate immediate cash for the company or stockholders, often considered an "end game" strategy.
- Pause Strategy: Used when a company needs a breathing spell to stabilize itself before taking on a new mission, often focusing on improved efficiency through better resource deployment and utilization.
Expansion Strategy
- Concentration Strategies: Involves converging resources on one or more of the firm's businesses in terms of products, markets, or functions, leading to expansion.
- Market Penetration: Focuses on increasing market share for existing products or services in existing markets.
- Market Development: Introduces existing products or services into new markets.
- Product Development: Introduces new products or services to existing markets.
- Integration: Combining activities related to the firm's current activities based on the value chain.
- Diversification: Identifying new directions of development that take the organization away from both existing products and markets.
- Cooperative Expansion: Involves co-existing competition and cooperation among rival firms for mutual benefit.
- Internationalization: Marketing products or services beyond the domestic market, requiring assessment of the international environment, evaluation of capabilities, and strategy for entry into foreign markets.
Retrenchment Strategy
- Cost and Asset Reduction: Aims to reverse declining sales and profits by reducing expenses and organizational scope.
- Distinctive Competence: The strategy is designed to fortify an organization's core strengths.
Combination Strategy
- Product-Market Expansion Matrix: Visualizes the combination of expansion, stability, and retrenchment strategies for different product and market combinations.
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