STRATEGIC MANAGEMENT
Comprehensive Exam Study Notes
Compiled from Lecture Slides 2, 3, 4, 5, 6, 7, 8, 10, 17 & 18
TABLE OF CONTENTS
1. Strategic Planning in Practice
2. Strategy and Technology
3. Business-level Strategy Framework
4. Corporate-level Strategy: Strategic Choices
5. Corporate-level Strategy: Frameworks (BCG, GE, SPACE)
6. Strategic Alliances
7. Global Expansion Strategies
8. Product and Process Innovation
9. Control Systems & Strategic Implementation
10. Strategic Implementation for Multi-Unit Organisations
1. STRATEGIC PLANNING IN PRACTICE
This topic covers how organizations plan strategically, the challenges of forecasting, cognitive biases
that affect decisions, and the qualities of effective strategic leaders.
1.1 Forecasting the Future
Organisations cannot perfectly predict the future, but two key tools help manage uncertainty:
Term Definition
Scenario Planning Formulating plans based on 'what-if' scenarios about the future.
Involves developing multiple plausible future states and preparing
strategies for each.
Decentralized Planning Decision-making authority, planning, and resource allocation are
distributed from a central body to lower-level managers or sub-
units. Enables faster local responses.
1.2 Cognitive Biases in Strategic Decision Making
Cognitive biases are systematic errors in decision-making arising from the way people process
information. Key concepts include heuristics, bounded rationality, and winning formulas.
Term Definition
Confirmation Bias Decision makers with strong prior beliefs make decisions based on
those beliefs even when evidence suggests otherwise.
Escalating Commitment Decision makers commit even more resources to a failing project
because they have already invested significantly.
Reasoning by Analogy Using simple analogies to make sense of complex problems — can
lead to oversimplification.
Representativeness Bias rooted in the tendency to generalize from a small sample or
even a single vivid anecdote.
Illusion of Control Overestimating one's ability to control events or outcomes.
Availability Error Estimating the probability of an outcome based on how easy it is to
imagine, not on actual data.
1.3 Techniques for Improving Decision Making
• Devil's Advocacy:
• Devil's Advocacy: One member of the decision-making team identifies all considerations that
might make a proposal unacceptable. Forces critical evaluation.
• Dialectic Inquiry: Generating a plan (thesis) and a counterplan (antithesis) that reflect plausible
but conflicting courses of action.
• Outside View: Identifying past successful or failed strategic initiatives to determine whether a
proposed initiative is likely to succeed.
1.4 Strategic Leadership
Effective strategic leaders exhibit the following qualities:
• Vision, eloquence, and consistency — a clear articulation of where the company is going
• Articulation of a business model — explaining how the firm creates value
• Commitment — dedication to the chosen strategy
• Being well informed — staying current on industry trends and competitors
• Willingness to delegate and empower — trusting subordinates with key decisions
• Astute use of power — knowing when and how to use influence
• Emotional intelligence — self-awareness, empathy, and relationship management
2. STRATEGY AND TECHNOLOGY
Examines how technical standards, format wars, and network effects shape competitive strategy in
technology-intensive industries.
2.1 Technical Standards & Format Wars
Term Definition
Technical Standard A set of technical specifications that producers adhere to when
making a product or component (e.g., Bluetooth, Wi-Fi, USB).
Format Wars Battles between competing standards to control the source of
differentiation and thus the value created for customers.
Dominant Design A common set of features or design characteristics that becomes
the accepted standard in an industry.
2.2 Benefits of Establishing Standards
• Guarantees compatibility between products and their complements
• Reduces confusion in the minds of consumers
• Lowers production costs through economies of scale
• Reduces risks for suppliers of complementary products, increasing supply
2.3 Establishment of Standards
Term Definition
Public Domain Standards Standards set by a government or industry association that any
company can freely incorporate into its product. Open to all — no
licensing fees.
2.4 Network Effects & Positive Feedback
Term Definition
Network Effects The phenomenon where the value of a product increases as more
people use it (e.g., social media platforms, telephone networks).
Positive Feedback Loop When one company's standard gains adoption, more complements
are built for it, making it more valuable, attracting more users — a
self-reinforcing cycle.
Switching Costs Costs (time, money, effort) that consumers face when changing
from one standard/product to another. High switching costs = lock-
in.
Lockout When a firm's standard wins the format war, competitors are
effectively locked out of the market.
💡 Key principle: In format wars, the company whose strategy best exploits positive feedback
loops WINS. Encouraging OEMs to not develop competing complementary technology is one
approach.
3. BUSINESS-LEVEL STRATEGY FRAMEWORK
Business-level strategy concerns how a company competes within a specific industry or market to
achieve competitive advantage.
3.1 Generic Business-Level Strategies
Porter identifies two fundamental sources of competitive advantage: low cost and differentiation.
Combined with competitive scope (broad vs. narrow), this produces four generic strategies:
Strategy Competitive Target Scope Key Focus
Advantage
Cost Leadership Lowest cost producer Broad market Operational
efficiency
Differentiation Unique valued product Broad market Innovation, quality,
brand
Cost Focus Lowest cost in segment Narrow segment Niche efficiency
Differentiation Focus Unique in segment Narrow segment Niche customisation
3.2 Lowering Costs through Functional Strategy
• Achieving economies of scale and learning effects
• Adopting lean production and flexible manufacturing technologies
• Implementing quality improvement methodologies to reduce waste and rework
• Streamlining processes to remove unnecessary steps
• Using IT and automation to streamline business processes
• Implementing just-in-time (JIT) inventory control systems
• Designing products that are inherently low-cost to produce and deliver
• Increasing customer retention to reduce churn costs
Result: Superior efficiency and superior product reliability.
3.3 Differentiation through Functional Strategy
• Customizing product offerings and marketing mix to different market segments
• Designing products with high perceived quality — function, features, and performance
• Developing a well-resourced customer-care function for rapid issue resolution
• Marketing efforts focused on brand building and perceived differentiation
• Hiring and employee development strategies to project the company's desired image
Objectives: Superior quality, innovation, customer responsiveness, and efficiency.
3.4 Blue Ocean Strategy
Proposed by Chan Kim and Renee Mauborgne — instead of competing in existing markets ('red
oceans'), create uncontested market space ('blue ocean'). Ask four questions:
Question Purpose Effect
ELIMINATE Which factors rivals take for granted can be Reduce costs
eliminated?
REDUCE Which factors should be reduced below Lower costs
industry standard?
RAISE Which factors should be raised above Increase value
industry standard?
CREATE What new factors can we create that rivals Increase value
don't offer?
💡 Southwest Airlines is a classic Blue Ocean example: eliminated meals/lounges/assigned
seating, raised speed, created frequent departures — new value at lower cost.
3.5 Ansoff's Matrix
A strategic planning tool for identifying growth opportunities:
Existing Products New Products
Existing Markets Market Penetration (lowest risk) Product Development
New Markets Market Development Diversification (highest risk)
4. CORPORATE-LEVEL STRATEGY: STRATEGIC
CHOICES
Corporate-level strategy deals with which industries/businesses a firm competes in and how it allocates
resources across them.
4.1 What Corporate-Level Strategy Involves
• Deciding in which businesses and industries a company should compete
• Selecting which value-creation activities it should perform in those businesses
• Determining how it should enter, consolidate, or exit businesses to maximise long-term
profitability
4.2 Generic Corporate-Level Strategies
• Stability:
• Stability: Maintaining current position; suitable when the environment is stable.
• Growth: Expanding into new markets, products, or geographies.
• Retrenchment: Cutting back operations, divesting, or refocusing to improve performance.
4.3 Horizontal Integration
Term Definition
Horizontal Integration Acquiring or merging with industry competitors to achieve
competitive advantages from larger size and scope.
Acquisition Using capital resources to purchase another company.
Merger An agreement between two companies to pool resources and
operations to better compete.
Benefits of Horizontal Integration
• Lowers cost structure
• Increases product differentiation
• Leverages competitive advantage more broadly
• Reduces rivalry within the industry
• Increases bargaining power over suppliers and buyers
Problems with Horizontal Integration
• Cultural clashes when merging very different company cultures
• High management turnover in acquired company (especially in hostile takeovers)
• Managers tend to overestimate benefits and underestimate integration challenges
4.4 Vertical Integration
Term Definition
Vertical Integration Expanding operations backward (into input industries) or forward
(into distribution/sales industries).
Backward Vertical Entering an industry that produces inputs for the company's
Integration products (e.g., manufacturer acquires a supplier).
Forward Vertical Entering an industry that uses, distributes, or sells the company's
Integration products (e.g., manufacturer opens retail stores).
Benefits of Vertical Integration
• Facilitates investments in efficiency-enhancing specialised assets
• Protects product quality
• Results in improved scheduling and coordination
Problems with Vertical Integration
• Increasing cost structure
• Disadvantaged when technology changes rapidly
• Problems when demand is unpredictable
• Mismatches in optimal scale between stages
4.5 Alternatives to Full Vertical Integration
Term Definition
Quasi Integration Use of long-term relationships or partial investment in
supplier/buyer activities, instead of full ownership.
Strategic Alliances Long-term agreements between two or more companies to jointly
develop products or processes for mutual benefit.
Strategic Outsourcing Allowing one or more value-chain activities to be performed by
specialist independent companies.
Outsourcing: Benefits and Risks
Benefits Risks
Lower cost structure Holdup risk (supplier becomes indispensable)
Increased product differentiation Increased competition (supplier works for rivals
too)
Focus on distinctive core competencies Loss of information and learning opportunities
4.6 Diversification
Term Definition
Diversification Entering new industries, distinct from the company's core industry,
to make new products for customers in new markets.
Diversified Company A company that makes and sells products in two or more distinct
industries.
Related Diversification Entering a new industry that is related to existing businesses by
some form of commonality in the value chain (e.g., shared
distribution).
Unrelated Diversification Entering industries with no value-chain relationship to existing
businesses — relies on general management competencies
(conglomerate).
Benefits of Diversification
• Transfer competencies between business units in different industries
• Leverage competencies to create business units in new industries
• Share resources between business units to realise economies of scope
• Utilise general organisational competencies to improve all business units
Problems with Diversification
• Changes in the industry or inside the company over time
• Diversification pursued for the wrong reasons (managerial empire-building)
• Excessive diversification leads to increasing bureaucratic costs
5. CORPORATE-LEVEL STRATEGY: FRAMEWORKS
Portfolio analysis frameworks help managers decide how to allocate resources across a range of
business units or product lines.
5.1 BCG Matrix (Boston Consulting Group)
Plots business units on two axes: Market Growth Rate (vertical) and Relative Market Share (horizontal).
Quadrant Market Share Market Strategy Example
Growth
Stars High High Invest to sustain growth Tesla EVs
and leadership (early 2020s)
Cash Cows High Low Harvest — maximise cash Microsoft
flow Office Suite
Question Marks Low High Invest heavily OR divest New tech
— analyse carefully startups
Dogs Low Low Divest or minimise Legacy
investment products
phased out
Cash Flow Dynamics
• Cash Cows fund Stars and selected Question Marks
• Dogs are typically divested to free up resources
BCG Matrix Limitations
• Oversimplification — only considers two factors
• Market definition is ambiguous
• Ignores synergies between business units
• Static analysis — market conditions change rapidly
• High market share does not always equal high profitability
5.2 GE-McKinsey 9-Cell Matrix
Plots business units on: Industry Attractiveness (vertical) vs. Business Unit Strength (horizontal).
Results in a 3x3 grid with 9 cells.
Dimension Key Factors
Industry Attractiveness (external) Market growth rate, market size, profitability, competitive
intensity, technology, regulation, cyclicality
Business Unit Strength (internal) Market share, growth in share, brand strength, profit
margins, technology capability, production capacity,
management strength, cost position
GE Matrix Cell-Specific Strategies
Zone Cells Strategy
GREEN (Invest) 1 (High/Strong), 2 (High/Medium), 4 Aggressive investment; build
(Med/Strong) selectively
YELLOW (Selective) 3 (High/Weak), 5 (Med/Med), 7 Maintain position; assess risk;
(Low/Strong) harvest
RED (Exit) 6 (Med/Weak), 8 (Low/Med), 9 Divest, liquidate, or harvest
(Low/Weak)
GE Matrix vs BCG Matrix
Aspect BCG GE-McKinsey
Dimensions 2 (growth & share) 2 composite dimensions with
multiple sub-factors
Cells 4 quadrants 9 cells — more nuanced
Flexibility Rigid factors Customisable factors
Complexity Low High
Best for Resource allocation overview Detailed strategic direction
5.3 SPACE Matrix
The Strategic Position and Action Evaluation matrix assesses four dimensions to determine overall
strategic posture.
Dimension Type Scoring Key Factors
Financial Strength (FS) Internal 1 (worst) to 6 (best) ROI, liquidity, leverage, cash flow
Competitive Advantage Internal -6 (worst) to -1 Market share, brand, loyalty,
(CA) (best) quality
Environmental Stability External -6 (worst) to -1 Technology change, inflation,
(ES) (best) competition
Industry Strength (IS) External 1 (worst) to 6 (best) Growth potential, profit potential,
productivity
Four Strategic Postures
Posture Location Characteristics Strategies
Aggressive Upper-right Strong finances + attractive Market penetration,
industry development, related
diversification, integration
Competitive Upper-left Strong competitive Horizontal integration,
advantage + attractive differentiation, market
industry specialisation
Conservative Lower-right Strong finances + weak Product development,
industry/competitive position retrenchment, cost reduction
Defensive Lower-left Weak competitive position + Retrenchment, divestiture,
unstable environment liquidation, turnaround
5.4 Framework Comparison
Aspect SPACE Matrix BCG Matrix GE Matrix
Dimensions 4 (2 internal, 2 2 (market growth & 2 composite
external) share) (attractiveness &
strength)
Focus Strategic posture Portfolio allocation Business unit strategy
Complexity Medium Low High
Best For Strategic direction Resource allocation Diversified
corporations
💡 Exam tip: Know which framework to apply in a given scenario. SPACE = overall direction;
BCG = portfolio balance; GE = detailed multi-factor analysis.
6. STRATEGIC ALLIANCES
Strategic alliances are long-term cooperative agreements between companies that can substitute for
full ownership while providing access to complementary resources.
6.1 Core Definitions
Term Definition
Strategic Alliance Long-term agreements between two or more companies to jointly
develop new products or processes for mutual benefit.
Modularity The degree to which a system's components can be separated and
recombined — enabling platform ecosystems.
Standardized Interface A point of interconnection adhering to a standard (e.g., USB)
enabling different systems to connect, exchange information, or
energy.
Platform Ecosystem A system of mutually dependent entities (suppliers, complements,
users) mediated by a stable core platform.
6.2 Platforms as a Strategic Compromise
Platforms beat tightly integrated products when:
• Customers are diverse and want more choices than a single firm can provide
• Third-party options are diverse and high quality
• Compatibility with third-party products can be made seamless
• The platform sponsor can retain quality control without producing complements itself
Platforms beat purely modular systems when:
• Complements are non-routine purchases with consumer uncertainty (customers want guidance)
• Integration between platform and complements provides performance advantages
• Some ecosystem components need subsidization to reach adequate quality
6.3 Building Long-Term Cooperative Relationships
Term Definition
Hostage Taking Exchanging valuable resources as a guarantee that each partner
will keep its side of the bargain.
Credible Commitment A believable promise or pledge to support long-term relationship
development between companies.
Parallel Sourcing Policy Entering into long-term contracts with at least two suppliers for the
same component, preventing any one supplier from becoming
opportunistic.
6.4 Strategic Outsourcing
Term Definition
Strategic Outsourcing Allowing one or more value-chain activities to be performed by
independent specialist companies to increase performance.
Virtual Corporation A company pursuing such extensive outsourcing that it only retains
the central value-creation functions that lead to competitive
advantage.
7. GLOBAL EXPANSION STRATEGIES
When expanding globally, firms must choose a strategy that balances the pressure to reduce costs
(standardise) against the pressure to be locally responsive (customise).
7.1 Four Basic Global Strategies
Strategy Cost Local Description
Reduction Responsiveness
Pressure
Global Standardisation High Low Treat the world as one market;
pursue economies of scale by
standardising products globally.
Localisation (Multi- Low High Customise products/marketing to
domestic) match local tastes in each country.
Transnational High High Simultaneously achieve global
efficiency AND local
responsiveness — very complex to
manage.
International Low Low Transfer core competencies
abroad; sell similar products with
minimal local adaptation.
7.2 Entry Modes
Term Definition
Exporting Producing in home country, selling abroad. Low risk but limited
control and higher transport costs.
Licensing Granting a foreign firm the right to produce/sell your product for a
fee. Low investment but risk of losing IP.
Franchising Granting a foreign firm the right to use your brand and business
model. Suitable for service firms.
Joint Ventures Forming a new company with a local partner. Shares costs/risks but
potential for conflict.
Wholly-owned Subsidiary Full ownership of foreign operation (via acquisition or Greenfield
investment). Maximum control but highest cost and risk.
7.3 Factors Affecting Entry Strategy
• Distinctive Competencies — firms with strong, hard-to-imitate core competencies can justify
higher-commitment entry modes
• Pressures of Cost Reduction — high cost pressures favour strategies like wholly-owned
subsidiaries for tight operational control
7.4 Global Strategic Alliances
Cooperative agreements between companies from different countries that are actual or potential
competitors.
Advantages Disadvantages
Facilitates entry into a foreign market Gives competitors a low-cost route to new
technology and markets
Shares fixed costs and associated risks Risk of giving away more than you receive
Brings together complementary skills neither Potential for conflict over strategic direction
firm could develop alone
Helps establish technological standards for the Cultural and organisational differences can
industry cause friction
Making Strategic Alliances Work
• Partner Selection — choose partners with complementary capabilities and compatible cultures
• Alliance Structure — design the alliance to reduce opportunism and protect sensitive knowledge
• Opportunism — watch for and manage partner self-interest that conflicts with alliance goals
• Managing the Alliance — invest in relationship management and build trust over time
8. PRODUCT AND PROCESS INNOVATION
8.1 Creativity vs. Innovation
Term Definition
Creativity The generation of new ideas or novel combinations of existing
ideas.
Innovation The process of translating creative ideas into tangible products,
services, or processes that create value.
Product Innovation Development of products that are new to the world or have superior
attributes to existing products.
Process Innovation Development of a new process for producing and delivering
products to customers — improves efficiency.
8.2 Customer Responsiveness
Customer responsiveness deals with identifying and satisfying customers' needs in a timely manner —
a key source of differentiation.
• Customer Response Time:
• Customer Response Time: Time that it takes for a good to be delivered or a service to be
performed.
Other sources of enhanced responsiveness: superior design, superior service, and superior after-sales
service and support.
Impact: Responsiveness allows differentiation → brand loyalty → premium pricing.
8.3 Analysing Competitive Advantage and Profitability
Return on Invested Capital (ROIC)
ROIC = Net Profit / Invested Capital
This can be decomposed into two components:
Component Formula What it measures
Return on Sales (ROS) Net Profits / Revenues How much profit is generated
from each dollar of revenue
Capital Turnover Revenues / Invested Capital How efficiently capital is used to
generate revenue
💡 ROIC = Return on Sales × Capital Turnover. A firm can improve ROIC by improving profit
margins, improving asset efficiency, or both.
8.4 Walmart vs. Target: Contrasting Business Models
A classic comparison used to illustrate how different business models yield different ROIC profiles:
• Walmart: Lower return on sales BUT higher capital turnover (high-volume, low-margin model)
• Target: Higher return on sales BUT lower capital turnover (premium positioning, lower volume)
Both can achieve similar ROIC through different paths.
9. CONTROL SYSTEMS AND GENERAL STRATEGIC
IMPLEMENTATION
Implementation requires managers to coordinate and control individual and unit activities to ensure
alignment with organisational goals.
9.1 Key Definitions
Term Definition
Control The process through which managers regulate activities of
individuals and units so they are consistent with the goals and
standards of the organisation.
Goal A desired future state that an organisation attempts to realise.
Standard A performance requirement that the organisation is meant to attain
on an ongoing basis.
Sub-goal An objective whose achievement helps the organisation attain or
exceed its major goals.
9.2 Methods of Control
Control Type Definition When Used
Personal Control Control by personal contact with and Small firms or flat structures
direct supervision of subordinates.
Bureaucratic Control through a formal system of written Large, stable organisations
Control rules and procedures.
Output Controls Setting goals for units/individuals and Where outputs can be
monitoring performance against those measured objectively
goals.
Market Controls Regulating behaviour by setting up an Diversified corporations
internal market for valuable resources
(e.g., capital allocation).
Incentive Controls Using rewards (bonuses, equity) to align Sales teams, executives
individual behaviour with organisational
goals.
Peer Control Pressure that employees exert on others Professional/team-based
within their team to perform up to environments
expectations.
💡 Exam tip: Be prepared to recommend an appropriate control mechanism for a given
organisational scenario. Match control type to structure and strategy.
10. STRATEGIC IMPLEMENTATION FOR MULTI-UNIT
ORGANISATIONS
Multi-business enterprises face unique control challenges depending on how integrated their divisions
are.
10.1 Controls in Diversified Firms with LOW Integration (Unrelated
Diversification)
• The need for integration between divisions is low
• Not trying to share resources or leverage core competencies across divisions
• No need for complex integrating mechanisms such as cross-divisional teams
Head office controls divisions primarily through:
○ Bureaucratic controls
○ Output controls
○ Incentive controls
○ Market controls
○ Some personal controls from head office managers
10.2 Controls in Diversified Firms with HIGH Integration (Related
Diversification)
The control problem is more complex when firms try to leverage core competencies and achieve
economies of scope across divisions.
Two Unique Control Problems:
• Problem 1: Finding a mechanism that INDUCES divisions to cooperate with each other for
mutual gain.
• Problem 2: Dealing with performance ambiguities — when divisions are tightly coupled, you
cannot assess one division's performance in isolation.
Solution:
• Adopt incentive controls for divisional managers linked to the performance of the ENTIRE
enterprise, not just their own division
• This naturally encourages cross-divisional cooperation
• Supplement with strong cultural controls — shared values and norms that emphasise
cooperation
Characteristic Low Integration (Unrelated) High Integration (Related)
Diversification type Conglomerate/Unrelated Related/Concentric
Division interdependence Low High
Need for coordination Low High
Primary control mechanisms Output, bureaucratic, market, All of above PLUS incentive
incentive linked to enterprise + cultural
controls
Performance measurement Division-by-division Must consider
combined/interdependent
performance
Key challenge Governance of independent Inducing cooperation +
units managing ambiguity
💡 Think of high integration firms like diversified tech companies that share R&D, distribution, or
brand. Controls must encourage sharing, not just individual performance.
QUICK REFERENCE: KEY TERMS GLOSSARY
Use this glossary for rapid revision before your exam.
Term Definition
Ansoff Matrix Growth framework: market penetration, market development,
product development, diversification.
BCG Matrix Portfolio tool: Stars, Cash Cows, Question Marks, Dogs — based
on growth rate and market share.
Blue Ocean Strategy Creating uncontested market space using Eliminate-Reduce-Raise-
Create framework.
Bureaucratic Control Control through formal written rules and procedures.
Cognitive Bias Systematic errors in decision-making from the way people process
information.
Credible Commitment Believable promise/pledge to support long-term business
relationships.
Diversification Entering new industries distinct from the core business.
Dominant Design The accepted common set of features/design in an industry.
Economies of Scope Cost reductions from sharing resources across multiple business
units.
Escalating Commitment Committing more resources to a failing project due to prior
investment.
Format Wars Battles between competing technical standards to become the
industry dominant design.
GE-McKinsey Matrix 9-cell portfolio tool based on industry attractiveness and business
unit strength.
Horizontal Integration Acquiring/merging with competitors to gain scale and scope
advantages.
Lockout When a competitor's standard wins the format war, shutting out
rivals.
Modularity Degree to which system components can be separated and
recombined.
Network Effects Value of a product increases as more users adopt it.
Output Control Setting goals and monitoring performance against them.
Parallel Sourcing Using at least two suppliers for same component to prevent supplier
opportunism.
Platform Ecosystem System of mutually dependent entities mediated by a stable core
platform.
Process Innovation New ways of producing and delivering products.
Product Innovation New or superior products with better attributes.
ROIC Return on Invested Capital = Net Profit / Invested Capital = ROS ×
Capital Turnover.
Related Diversification Entering industries related to existing business via shared value-
chain activities.
Scenario Planning Planning based on 'what-if' scenarios to manage future uncertainty.
SPACE Matrix Strategic posture tool assessing Financial Strength, Competitive
Advantage, Environmental Stability, and Industry Strength.
Strategic Alliance Long-term cooperative agreement between companies for mutual
benefit.
Strategic Outsourcing Allowing value-chain activities to be performed by specialist
external firms.
Technical Standard A set of technical specifications that producers adhere to in a
market.
Unrelated Diversification Entering industries with no value-chain connection to existing
business (conglomerate).
Vertical Integration Expanding into supplier industries (backward) or distribution
industries (forward).
Virtual Corporation Company that outsources all but its core competency activities.