Untitled Flashcards Set

Market value

The firm’s value based on intangible assets (e.g., reputation, human capital).

Book value

The accounting value of tangible assets.

Intellectual assets

High-value resources related to knowledge and skills, typically seen in tech firms like Apple.

Knowledge economy

An economy where value is derived from knowledge and intellectual assets rather than physical production.

Social capital

Networks of relationships within an organization.

Pied Piper Effect

Occurs when employees leave a company to join a competitor as a team.

Downside of excessive social capital

Groupthink, where consensus is prioritized over creativity and individuality.

Corporate-level strategy

Focuses on managing multiple businesses and diversification.

Vertical integration

Controlling suppliers (backward) or distributors (forward) to increase efficiency.

Divestment

Selling off a business unit to refocus resources.

BCG matrix

Categorizes businesses as Stars, Question Marks, Cash Cows, Dogs.

Strategic alliance

A partnership between businesses that does not create a new legal entity.

Asset restructuring

Selling unproductive assets to improve financial performance.

Intellectual property (IP)

Includes patents, trademarks, and copyrights.

Differentiation strategy

Requires cost parity with competitors to stand out in the market.

Turnaround strategy

Involves cutting unprofitable segments and improving productivity.

How does the internet harm differentiation strategies?

By increasing price comparisons and commoditization.

What distinguishes corporate-level strategy from business-level strategy?

Corporate-level strategy focuses on managing multiple businesses and diversification.

What defines a core competence?

A core competence must be valuable, rare, and difficult to imitate.

What does vertical integration involve?

Controlling suppliers (backward) or distributors (forward).

What is Costco’s acquisition of Innovel Solutions an example of?

Vertical Integration.

What are the categories in the BCG matrix?

Stars, Question Marks, Cash Cows, Dogs.

What is a divestment?

Selling off a business unit to refocus resources.

What is a key downside of mergers?

High takeover premiums and cultural clashes.

How do strategic alliances differ from joint ventures?

Joint ventures create a new legal entity, whereas strategic alliances are often non-equity collaborations.

What does asset restructuring involve?

Selling unproductive assets.

What comprises intellectual property (IP)?

Patents, trademarks, and copyrights.