Corporate Scope and Global Strategies

These flashcards cover key concepts related to corporate strategy, including scope changes, global strategies, and partnership dynamics.

Vertical Integration

Expansion of a company to take control of multiple steps in the production and distribution of a product.

Backward Integration

Expanding scope to make materials that go into the core product, moving upstream in the supply chain.

Forward Integration

Expanding scope to carry out activities closer to the end users, moving downstream in the supply chain.

Horizontal Diversification

Expansion into different product markets that may or may not be related to the core product.

Related Diversification

Entering a product market that is related to the core product.

Unrelated Diversification

Entering a product market that is unrelated to the core product.

Geographical Scope

Expanding a business beyond its original location, which can include international or local expansion.

CAGE Distances

Cultural, Administrative, Geographical, and Economic distances that companies consider when going global.

Export Strategy

A global strategy characterized by low responsiveness and low efficiency, suitable for entering foreign markets.

Multidomestic Strategy

A strategy focused on local responsiveness with high emphasis on tailoring products to local markets.

Global Strategy

A strategy aimed at achieving global efficiency with low emphasis on local responsiveness.

Transnational Strategy

A strategy that leverages local responsiveness and global efficiency, common among tech companies.

Aggregation Strategy

The global strategy that focuses on leveraging economies of scale through standardization.

Adaptation Strategy

A strategy that focuses on customization to win over local customers.

Arbitrage Strategy

A strategy that leverages cost differences in the macro environment across different locations.

Mergers and Acquisitions (M&As)

Mergers involve the combination of two entities while acquisitions result in the target ceasing to exist.

Transaction Costs (TCs)

Costs incurred during exchanges of goods or services, which can be high in certain situations.