Business Management Capstone Questions with Verified Solutions (Rated A+)
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Business Management Capstone
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Business Management Capstone
Business Management Capstone Questions with Verified Solutions (Rated A+)
Cost Leadership - Answers Emphasizes producing standardized products at a low per-unit cost for consumers who are price-sensitive
Type 1: Low-Cost Strategy (at the lowest price available on the market)
Type 2: Best-Value...
Business Management Capstone Questions with Verified Solutions (Rated A+)
Cost Leadership - Answers Emphasizes producing standardized products at a low per-unit cost for
consumers who are price-sensitive
Type 1: Low-Cost Strategy (at the lowest price available on the market)
Type 2: Best-Value Strategy (best price available on the market)
How to: a) economies of scale, b) experience curve, c) lower input costs, d) first mover advantage, e)
capacity utilization
Differentiation - Answers A strategy aimed at producing products and services considered unique
industrywide and directed at consumers who are relatively price-insensitive
POP (point of parity)
POD (point of difference)
Focus or Niche - Answers Producing products or services that fulfill the needs of a small group of
consumers
BCG Matrix - Answers Graph with the vertical axis the "industry growth rate" and the horizontal axis
"Market share." Four quadrants, the first (top right) "Question Marks" (High industry growth rate, low
market share - category booming, but your falling behind). Quadrant 2 (top left) "Stars" (has high
industry growth rate and high market share). Quadrant 3 (bottom left) "Cash Cow" (Industry growth rate
low, market share high - ex. Jello, which is also a Eponym, like Kleenex). Quadrant 4 (bottom right) "Dog"
(Low industry growth rate and low market share - like Blockbuster, VHS's)
Vertical Integration (3 Types)
Integration strategies - Answers Backward Integration: Seeking ownership or increased control of a
firm's suppliers, such as a manufacturer acquiring its raw material source firms. (Campbell's soup buying
the company that makes the cans for their soup) (this lowers cost, eliminates supplier power, and
improves forecasting)
Forward Integration: Involves gaining ownership or increased control over distributors or retailers, such
as a manufacturer opening its own chain of stores. (Nike) (Retain profits, distributors expensive, grow
industries)
Horizontal Integration: Acquiring a rival firm. (Macy's buying Marshall Fields) (Give them market share,
economies of scale)
, Financial Objectives - Answers Include desired results growth in revenues, growth in earnings, higher
dividends, larger profit margins, greater return on investment, higher earnings per share, a rising stock
price, improved cash flow, and so on.
Strategic Objectives - Answers Desired results such as a larger market share, quicker on-time delivery
than rivals, shorter design-to-market times than rivals, lower costs than rivals, higher product quality
than rivals, wider geographic coverage than rivals, achieving technological leadership, consistently
getting new or improved products to market ahead of rivals.
Market Penetration (intensive strategy) - Answers Increasing market share for present products or
services in present markets through greater marketing efforts. Increase market share, increase usage
rate.
Strategic Alliances - Answers agreement between two or more parties to pursue a set of agreed upon
objectives needed while remaining independent organizations. This form of cooperation lies between
mergers and acquisitions and organic growth.
Diversification - Answers Related Diversification
Unrelated Diversification
Acquisitions and Mergers - Answers Merger: occurs when two organizations of about equal size unite to
form one enterprise
Acquisition: occurs when a large organization purchases (acquires) a smaller firm, or vice versa
Joint Ventures - Answers A popular strategy that occurs when two or more companies form a temporary
partnership or consortium for the purpose of capitalizing on some opportunity
Related Diversification (diversification strategy) - Answers Adding new but related products or services
(ex. Toys 'R' us developed a new Wi-Fi tablet computer for children)
Unrelated Diversification (diversification strategy) - Answers Adding new, unrelated products or services
(ex. IKEA opening a chain of motels in Europe)
Market Development (intensive strategy) - Answers Introducing present products or services into anew
geographic area (ex. China Petrochemical purchased three Canadian oil companies, Daylight Energy,
Tanganyika Oil, and Syncrude Canada)
Product Development (intensive strategy) - Answers Seeking increased sales by improving present
products or services or developing new ones (ex. GE building a new composite material jet engines,
whereas rival Pratt & Whitney is developing newly designed jet engines)
Retrenchment (defensive strategy) - Answers Regrouping through cost and asset reduction to reverse
declining sales and profit (ex. Callaway Golf cut 12 percent of its workforce; Deutsche Bank AG cut 1,000
jobs from its investment bank segment)
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