Lecture 7 - Corporate Strategy Overview

<p>Blatant transaction costs (D)</p> Signup and view all the answers

<p>To clarify the role of property rights (B)</p> Signup and view all the answers

<p>95% or more of revenue comes from a single business. (A)</p> Signup and view all the answers

<p>Unrelated diversification (D)</p> Signup and view all the answers

<p>To escape stagnant or declining industries. (D)</p> Signup and view all the answers

<p>Utilizing a resource across multiple activities more efficiently. (B)</p> Signup and view all the answers

<p>Tangible resources (C)</p> Signup and view all the answers

<p>To protect against opportunistic behavior (C)</p> Signup and view all the answers

<p>Opportunistic actions that exploit incomplete contracts (A)</p> Signup and view all the answers

<p>Transaction asset-specificity (C)</p> Signup and view all the answers

<p>To create a life networking platform for sharing pictures (A)</p> Signup and view all the answers

<p>Reduced flexibility in operations (A)</p> Signup and view all the answers

<p>By allowing dual sourcing to manage cost-quality challenges (C)</p> Signup and view all the answers

<p>Pharmaceuticals and chemical knowledge (C)</p> Signup and view all the answers

<p>Reduction in overall product quality (A)</p> Signup and view all the answers

<p>It focused on printing rather than sharing experiences. (B)</p> Signup and view all the answers

<p>The rise of smartphone photography (B)</p> Signup and view all the answers

<p>Ability to renegotiate contracts (C)</p> Signup and view all the answers

<p>A steady decline in the market for chemical imaging (B)</p> Signup and view all the answers

<p>Defining the scope of the firm’s operations (B)</p> Signup and view all the answers

<p>Health diagnostics and pharmaceuticals (C)</p> Signup and view all the answers

<p>It limited Kodak's ability to adapt to digital trends. (D)</p> Signup and view all the answers

<p>A significant loss of market share (D)</p> Signup and view all the answers

<p>All businesses share product, technological, and distribution linkages. (C)</p> Signup and view all the answers

<p>Sharing activities among businesses to create value. (B)</p> Signup and view all the answers

<p>Related constrained has strong links; related linked has limited links. (C)</p> Signup and view all the answers

<p>Unique capabilities that give competitive advantage. (A)</p> Signup and view all the answers

<p>By sharing activities and transferring core competencies. (B)</p> Signup and view all the answers

<p>A company offering both household appliances and fashion apparel. (A)</p> Signup and view all the answers

<p>The complex relationships between different business units. (B)</p> Signup and view all the answers

<p>Leveraging customer data analytics across multiple brands. (C)</p> Signup and view all the answers

<p>The joining of two independent firms to form a combined entity (C)</p> Signup and view all the answers

<p>Related acquisitions (A)</p> Signup and view all the answers

<p>CEO overconfidence (D)</p> Signup and view all the answers

<p>It reduces costs and helps refocus resources (A)</p> Signup and view all the answers

<p>To preserve opportunities for future growth (C)</p> Signup and view all the answers

<p>It diminishes chances for long-term growth (A)</p> Signup and view all the answers

<p>To generate cash and improve performance (B)</p> Signup and view all the answers

<p>Related acquisitions outperform unrelated ones (B)</p> Signup and view all the answers

Costs associated with transferring goods, verifying quality, valuing, and paying.

A firm owning multiple stages in the product's supply chain.

A firm gaining ownership of earlier stages in the production process.

A firm taking possession and control of later stages of the supply chain.

Transaction Cost Economics: theory evaluating when firms merge into a vertical supply chain.

A company that gets 95% or more of its revenue from a single business line.

Diversification where businesses share links or connections, but less than 70% of revenue comes from a dominant business.

Diversification where no common links or connections exist between businesses, and less than 70% of revenue comes from a dominant business.

Using a resource across several activities, using less of that resource than if activities were done separately.

Reasons for a company to diversify, often including growth, risk spreading, and value creation.

Investments that have a higher value in a specific transaction than in any other use.

Opportunistic behavior where one party exploits another party's asset-specific investment by demanding a higher price or refusing to cooperate.

A mixed approach to vertical integration where a company uses both internal and external providers.

Decisions defining a firm's product and market scope.

Relying on multiple, possibly both internal and external, sources for supplies to offset problems with single sourcing.

A business's range of activities along the value chain; extent of controlling different production stages during production.

A strategy where less than 70% of revenue comes from the main business, and all businesses share product, technological, and distribution linkages.

A strategy where there are only limited links between different businesses within a corporation.

When different business units within a company share resources like production facilities, distribution channels, or customer service.

Applying a company's key skills and knowledge to different businesses within the corporation.

Sharing resources and activities between different business units to achieve economies of scope.

Applying core competencies from one business to other businesses within the corporation.

When a company can achieve economies of scope through sharing activities and transferring core competencies, leading to competitive advantages.

Joining of two independent companies to form a single entity.

One company purchases another company, potentially taking control.

Acquisition of a company in the same or similar industry as the acquiring firm.

Acquisition of a company in a completely different industry than the acquiring firm.

Acquisition expanding a firm's product or service offerings into new markets.

Overestimation of one's ability to succeed in acquiring and managing companies.

Selling off a portion of a company or its assets.

A measure of a company's profitability, showing earnings before interest, taxes, depreciation, and amortization.

Kodak acquired Ofoto in 2001, a photo-sharing platform, but instead of building a social networking platform, they focused on using it to boost print sales.

Kodak failed to recognize the shift from physical photographs to digital images and the emerging market for social networking.

According to The Strategy Story, Kodak's downfall was due to focusing on the wrong question. Instead of asking, "How can we make more money with digital pictures?" they focused on "How can we transition to digital pictures without hurting our film business?"

Kodak's financial data shows a steady decline in operating profit and net sales from 2000 onwards, indicating a failure to adapt to the digital revolution.

Kodak's core business, selling chemicals used in film processing. This sector shows a decline in both operating profit and sales, indicating the traditional film market was shrinking.

Kodak's business of developing photos in physical labs. This sector also experienced a decline, reflecting the growing popularity of digital photography.

Kodak's foray into medical imaging. While this sector didn't decline, it didn't save Kodak either, highlighting their inability to adapt to changing markets.

Kodak's attempt to enter the digital photography market. Although successful, it was too little too late to prevent the decline of their overall business.