Business Level Strategy and the Industry Environment

Flashcards summarizing key concepts related to business level strategy and industry environments.

Fragmented Industries

Industries characterized by a large number of small firms, each of which has a small market share.

Consolidation

The process of combining smaller companies into fewer, larger entities to increase efficiency and market power.

Chaining

Establishing a network of linked merchandise outlets to achieve cost leadership or differentiation.

Franchising

A method where local outlets of a chain are owned and managed by individuals, allowing them to operate under the franchise's brand.

Horizontal Mergers

The combination of two companies in the same industry to reduce competition and increase market power.

Embryonic Industries

Industries in the early stages of development, characterized by slow growth, limited performance, and customer unfamiliarity.

Mass Market

A market segment that becomes fully developed as consumers become more familiar with the product and its benefits.

Innovators

Individuals or companies that are the first to adopt a new product or technology.

Strategic Commitments

Long-term decisions that a company makes to support a particular strategy, often involving significant resources.

Globalization

The process of increasing international integration and interdependence of economies and markets.

Transnational Strategy

A strategy that aims to combine global efficiencies with local responsiveness.

Joint Venture

A business arrangement where two or more parties create a new entity, sharing resources, risks, and profits.

Wholly Owned Subsidiary

A company that is completely owned by another company, allowing for full control of operations.

Corporate Level Strategy

Strategic decisions regarding what business areas a company should operate in to maximize long-term profitability.

Vertical Integration

The process by which a company expands its business operations either backward into industries that produce inputs or forward into industries that sell or distribute products.

Economic Disadvantages

Factors that can lead to higher costs and inefficiencies, particularly in rapidly changing industries.