Chapter 6

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
M2 Test
• Write your Name, Roll Number on top of
the page
• Test Duration is 30 Min.
• Write very Legible and brief answer.
Confine your answers to one back-to-
back sheet provided.
6–1
For Even Roll Numbers:

Draw the Industry and firm level value chains and
suggest where does Amul add the maximum value?
For Odd Roll Numbers:

How does the co-operative-yet-competitive strategy
differ from the usual competitive strategy? What are
the generic success factors for co-operative
organizations?
• Write your Name, Roll Number on top of the page

• Test Duration is 30 Min.
• Write very Legible and brief answers.
• Confine your answers to the one sheet provided. Back-to-back is OK.
6–2
• Write your Name, Roll Number on top of the page. Test Duration is 30 Min.
• Write very Legible and brief answers. Confine your answers to both sides of the given sheet.
Q1. For Even Roll Numbers:

List various JVs that Tata Motors have entered in its
journey. How these JVs fulfil Tata Motor’s Strategic
vision ?
Q1. For Odd Roll Numbers:

Describe various Automobile segments that Tata
Motors operate and specific offerings/models they have
for these segments.
Q2. For ALL Roll Numbers
What was strategy behind Tata Nano and why it
eventually failed ? What you would have done
diffrerently (in hind-sight) to make it work !
6–3
19e
CRAFTING
AND
EXECUTING
STRATEGY
The Quest For
Competitive Advantage
Concepts and Cases
Thompson | Peteraf | Gamble | Strickland | Jain

6–4
CHAPTER 6
STRENGTHENING A COMPANY’S
COMPETITIVE POSITION:
 Strategic moves
Start-up
 Timing, ….And Single Business
Conglomerate
 Scope of operations
6–5
6–6
TIMING A FIRM’S OFFENSIVE AND
DEFENSIVE STRATEGIC MOVES

Timing’s Importance:
 Knowing when to make a strategic move is
as crucial as knowing what move to make.
 Moving first is no guarantee of success or

competitive advantage.
 The risks of moving first to stake out a

monopoly position must be carefully
weighed.
6–8
Strategic Moves
 Integration – Forward and Backward

 Increase / Control Customer Centricity Scope
of
 Reduce Supplier dependence, Supplier bargaining power Opera
 Diversification - Related and Unrelated tions

/
 Mergers and Acquisitions (M&A) Core
 JVs or Deep Partnerships, Exclusive Partnerships Comp

etency
 Outsourcing
 Divestiture or Hiving-off / exiting a business
o Defensive Strategy
• Talent retention, IP Creation (BlackBerry, Motorola, IBM,..)
• Constantly looking out to Strengthening the Core competencies
o Offensive Strategies
• Price war, talent poaching, dumping, Fast Product launches,..
o First Mover, Second Mover, Late Mover , Lateral Mover,
6–9
INTEGRATING BACKWARD TO ACHIEVE
GREATER COMPETITIVENESS
• Integrating Backwards By:
– Achieving same scale economies as outside suppliers
— low-cost based competitive advantage.
– Matching or beating suppliers’ production efficiency
with no drop-off in quality — differentiation-based
• Reasons for Integrating Backwards:

– Reduction of supplier power
– Reduction in costs of major inputs
– Assurance of the supply and flow of critical inputs
– Protection of proprietary know-how
6–10
INTEGRATING FORWARD TO ENHANCE
COMPETITIVENESS
• Reasons for Integrating Forward:
– To lower overall costs by increasing channel
activity efficiencies relative to competitors.
– To increase bargaining power through
control of channel activities.
– To gain better access to end users.
– To strengthen and reinforce brand
awareness.
– To increase product differentiation.
6–11
Alliances and Partnerships

• A strategic alliance is a formal agreement
between two or more separate companies in
which they agree to work cooperatively toward
some common objective.
• A joint venture is a partnership involving the

establishment of an independent corporate
entity that the partners own and control jointly,
sharing in its revenues and expenses.
6–12
OUTSOURCING STRATEGIES: NARROWING

THE SCOPE OF OPERATIONS
• Outsourcing
– Involves farming out value chain activities to outside vendors.
• Outsource an activity if it:

– Can be performed better or more cheaply by outside
specialists.
– Is not crucial to achieving sustainable competitive advantage.
– Improves organizational flexibility and speeds time to
market.
– Reduces risks due to new technology and/or buyer
preferences.
– Assembles diverse kinds of expertise speedily and efficiently.
– Allows the firm to concentrate on its core business, leverage
key resources, and do even better what it does best.
6–13
L&T : From a tiny Start-up to Mammoth
Conglomerate
• Started 75 years back as two man show – now a

Diversified conglomerate of 50+ Businesses
– Construction, Project Execution, Manufacturing, Power,
Nuclear, Electrical Business, Control & Automation, IT,..
– Owns Major assets in Shipbuilding, Heavy Equipment
Manufacturing (Hazira, Powai, Coimbatore)
– Major Defence contractor in Navy and Army
– Major Airports, Roads, Townships, Metros (India, Gulf)
– Oil & Gas Exploration and Processing – Turn-key contractor
• Hived Off/ Exited : Cement (Birla), Tractor(JD), Ready-mix

concrete(Cemex), Rubber Machinery, Valves(Audco)
• Strengthened : IT and Embedded Systems & Services , Smart-
Cities
• Diversified into : Financial Services, Insurance (exited now),
Reality, Solar Energy (Projects)
System Integration and end-to-end Project Execution Capabilities
We make things that Make India Proud !
6–14
MAXIMIZING THE POWER OF A
STRATEGY
Making choices that complement

a competitive approach and
maximize the power of strategy
Offensive and Competitive Scope of

Defensive Dynamics and the Operations along
Competitive Timing of Strategic the Industry’s
Actions Moves Value Chain
6–15
CONSIDERING STRATEGY-
ENHANCING MEASURES
• Whether and when to go on the offensive.
• Whether and when to employ defensive strategies.
• When to undertake strategic moves—first mover,
a fast follower, or a late mover.
• Whether to merge with or acquire another firm.
• Whether to integrate backward or forward into more
stages of the industry’s activity chain.
• Which value chain activities, if any, should be
outsourced.
• Whether to enter into strategic alliances or
partnership arrangements.
6–16
GOING ON THE OFFENSIVE —
STRATEGIC OPTIONS TO IMPROVE A

FIRM’S MARKET POSITION
• Strategic Offensive Principles:
– Focus on relentlessly building competitive
advantage and then converting it into
sustainable advantage.
– Apply resources where rivals are least able to
defend themselves.
– Employ the element of surprise as opposed to
doing what rivals expect and are prepared for.
– Display a strong bias for swift, decisive, and
overwhelming actions to overpower rivals.
6–17
Sometimes a company’s best strategic

option is to seize the initiative, go on
the attack, and launch a strategic
offensive to improve its market
position.
6–18
CHOOSING THE BASIS FOR
COMPETITIVE ATTACK
• Avoid directly challenging a targeted
competitor where it is strongest.
• Use the firm’s strongest strategic assets to

attack a competitor’s weaknesses.
• The offensive may not yield immediate results

if market rivals are strong competitors.
• Be prepared for the threatened competitor’s

counter-response.
6–19
The best offensives use a company’s

most powerful resources and
capabilities to attack rivals in the
areas where they are weakest.
6–20
PRINCIPAL OFFENSIVE STRATEGY
OPTIONS
• Offer an equally good or better value product at a lower
price as a cost-based advantage to attack competitors.
• Leapfrog competitors by being first to market with
next-generation products.
• Pursue continuous product innovation to draw sales
and market share away from less innovative rivals.
• Adopt and improve on the good ideas of any other
firms.
• Use hit-and-run or guerrilla warfare tactics to grab
sales
and market share from complacent or distracted rivals.
• Launch a preemptive strike to secure an advantageous
market position that rivals cannot easily duplicate. 6–21
CHOOSING WHICH RIVALS
TO ATTACK
Best Targets for
Offensive Attacks
Market leaders Runner-up firms

Struggling Small local
that are in with weaknesses
enterprises on and regional
vulnerable in areas where
the verge of firms with limited
competitive the challenger
going under capabilities
positions is strong
6–22
BLUE-OCEAN STRATEGY — A SPECIAL
KIND OF OFFENSIVE
• The business universe is divided into:
– An existing market with boundaries and
rules in which rival firms compete for
advantage.
– A “blue ocean” market space, where the
industry has not yet taken shape, with no
rivals and wide-open long-term growth and
profit potential for a firm that can create
demand for new types of products.
6–23
ILLUSTRATION CAPSULE 6.1
GILT GROUPE’S BLUE-OCEAN STRATEGY

IN THE U.S. FLASH SALE INDUSTRY
• Given the rapidity with which most first-mover
advantages based on Internet technologies can
be overcome, what would have led Gilt Groupe
to expect to build a sustainable competitive
advantage based on its initial business model?
• Is Gilt Groupe a “one-trick pony” business that

the ephemeral nature of a first-mover
advantage strategy tends to favor?
• How critical is timing to first-mover advantage?

6–24
A blue-ocean strategy offers growth

in revenues and profits by discovering
or inventing new industry segments
that create altogether new demand.
6–25
Good defensive strategies can help

protect a competitive advantage but
rarely are the basis for creating one.
6–26
STRATEGDEFENSIVE STRATEGIES—PROTECTING
MARKET POSITION AND COMPETITIVE

ADVANTAGEIC MANAGEMENT PRINCIPLE
Purposes of Defensive Strategies
Weaken the impact Influence challengers

Lower the firm’s risk
of an attack to aim their efforts
of being attacked
that does occur at other rivals
6–27 6–27
challengers.
There are many ways to throw
obstacles in the path of would-be
6–28
BLOCKING THE AVENUES OPEN TO
CHALLENGERS
• Adopt alternative technologies as a hedge against
rivals attacking with a new or better technology.
• Introduce new features and models to broaden product
lines to close gaps and vacant niches.
• Maintain economy-pricing to thwart lower price
attacks.
• Discourage buyers from trying competitors’ brands.
• Make early announcements about new products or
price changes to induce buyers to postpone switching.
• Challenge quality and safety of competitor’s products.
• Grant discounts or better terms to intermediaries who
handle the firm’s product line exclusively.
6–29
SIGNALING CHALLENGERS THAT
RETALIATION IS LIKELY
• Signaling is an effective defensive strategy
if the firm follows through by:
– Publicly announcing its commitment to
maintaining the firm’s present market share.
– Publicly committing to a policy of matching
competitors’ terms or prices.
– Maintaining a war chest of cash and marketable
securities.
– Making a strong counter-response to the moves of
weaker rivals to enhance its tough defender image.
6–30
Because of first-mover advantages

and disadvantages, competitive
advantage can spring from when a
move is made as well as from what
move is made.
6–31
TIMING A FIRM’S OFFENSIVE AND
DEFENSIVE STRATEGIC MOVES

• Timing’s Importance:
– Knowing when to make a strategic move is
as crucial as knowing what move to make.
– Moving first is no guarantee of success or
– The risks of moving first to stake out a
monopoly position must be carefully
weighed.
6–32
CONDITIONS THAT LEAD TO
FIRST-MOVER ADVANTAGES
• When pioneering helps build a firm’s
reputation and creates strong brand loyalty.
• When a first mover’s customers will thereafter
face significant switching costs.
• When property rights protections thwart rapid
imitation of the initial move.
• When an early lead enables movement down
the learning curve ahead of rivals.
• When a first mover can set the technical
standard for the industry.
6–33
THE POTENTIAL FOR LATE-MOVER
ADVANTAGES OR FIRST-MOVER
DISADVANTAGES
• When pioneering is more costly than imitating and
offers negligible experience or learning-curve
benefits.
• When the products of an innovator are somewhat
primitive and do not live up to buyer expectations.
• When rapid market evolution allows fast followers
to leapfrog a first mover’s products with more
attractive next-version products.
• When market uncertainties make it difficult to
ascertain what will eventually succeed.
6–34
TO BE A FIRST MOVER OR NOT

• Does market takeoff depend on complementary
products or services that currently are not
available?
• Is new infrastructure required before buyer demand
can surge?
• Will buyers need to learn new skills or adopt new
behaviors?
• Will buyers encounter high switching costs in
moving to the newly introduced product or service?
• Are there influential competitors in a position to
delay or derail the efforts of a first mover?
6–35
AMAZON.COM ’S FIRST-MOVER ADVANTAGE

IN ONLINE RETAILING
• Which first-mover advantages did Jeff Bezos

have in starting Amazon.com?
• What first-mover disadvantages did Bezos

have to watch for after starting Amazon.com?
• Why was the learning curve so steep for

Amazon.com?
6–36
STRENGTHENING A FIRM’S MARKET
POSITION VIA ITS SCOPE OF OPERATIONS
Defining the Scope of

the Firm’s Operations
Extent of its
Size of its
Range of its geographic
Breadth of its competitive
activities market
product and footprint on
performed presence and
service offerings its market
internally its mix of
or industry
businesses
6–37
• Horizontal scope is the range of product and

service segments that a firm serves within its
focal market.
• Vertical scope is the extent to which a firm’s

internal activities encompass one, some,
many, or all of the activities that make up an
industry’s entire value chain system, ranging
from raw-material production to final sales
and service activities.
6–38
HORIZONTAL MERGER AND
ACQUISITION STRATEGIES
• Merger
– Is the combining of two or more firms into
a single corporate entity that often takes
on a new name.
• Acquisition
– Is a combination in which one firm, the
acquirer, purchases and absorbs the
operations of another firm, the acquired.
6–39
BENEFITS OF INCREASING
HORIZONTAL SCOPE
• Increasing a firm’s horizontal scope
strengthens its business and increases its
profitability by:
– Improving the efficiency of its operations
– Heightening its product differentiation
– Reducing market rivalry
– Increasing the firm’s bargaining power over
suppliers and buyers
– Enhancing its flexibility and dynamic
capabilities
6–40
STRATEGIC OJECTIVES FOR HORIZONTAL
MERGERS AND ACQUISITIONS

• Creating a more cost-efficient operation out
of the combined companies.
• Expanding the firm’s geographic coverage.
• Extending the firm’s business into new
product categories.
• Gaining quick access to new technologies or
complementary resources and capabilities.
• Leading the convergence of industries whose
boundaries are being blurred by changing
technologies and new market opportunities.
6–41
BRISTOL-MYERS SQUIBB’S “STRING-OF-PEARLS”

HORIZONTAL ACQUISITION STRATEGY
• Which strategic outcomes did Bristol-Myers Squibb
pursue through its “string-of-pearls” acquisition
strategy?
• Why did Bristol-Myers Squibb choose to pursue a

acquisition strategy that was different from its
industry competitors?
• How did increasing the horizontal scope of Bristol-

Myers Squibb through acquisitions strengthen its
competitive position and profitability?
6–42
WHY MERGERS AND ACQUISITIONS
SOMETIMES FAIL TO PRODUCE ANTICIPATED

RESULTS
• Strategic Issues:
– Cost savings may prove smaller than expected.
– Gains in competitive capabilities take longer to
realize or never materialize at all.
• Organizational Issues
– Cultures, operating systems and management
styles fail to mesh due to resistance to change
from organization members.
– Loss of key employees at the acquired firm.
– Managers overseeing integration make mistakes in
melding the acquired firm into their own.
6–43
A vertically integrated firm is one

that performs value chain activities
along more than one stage of an
industry’s value chain system.
6–44
VERTICAL INTEGRATION
STRATEGIES
• Vertically Integrated Firm.
• Is one that participates in multiple segments

or stages of an industry’s overall value chain.
• Vertical Integration Strategy.
• Can expand the firm’s range of activities

backward into its sources of supply and/or
forward toward end users of its products.
6–45
TYPES OF VERTICAL INTEGRATION
STRATEGIES
Vertical Integration
Choices
Full Partial Tapered

Integration Integration Integration
6–46
TYPES OF VERTICAL INTEGRATION
STRATEGIES
• Full Integration
– A firm participates in all stages
of the vertical activity chain.
• Partial Integration
– A firm builds positions only in selected
stages of the vertical chain.
• Tapered Integration
– Involves a mix of in-house and outsourced
activity in any stage of the vertical chain.
6–47
THE ADVANTAGES OF A VERTICAL
INTEGRATION STRATEGY
Benefits of a Vertical
Integration Strategy
Add materially Strengthen

Boost
to a firm’s the firm’s
the firm’s
technological competitive
profitability
capabilities position
6–48
• Backward integration involves entry

into activities previously performed by
suppliers or other enterprises positioned
along earlier stages of the industry
value chain system
• Forward integration involves entry into

value chain system activities closer to
the end user
6–49
DISADVANTAGES OF A VERTICAL
• Increased business risk due to large capital
investment.
• Slow acceptance of technological advances or more
efficient production methods.
• Less flexibility in accommodating shifting buyer
preferences that require non-internally produced
parts.
• Internal production levels may not be of sufficient
volumes to allow for economies of scale.
• Capacity matching problems for efficient production of
internally-produced components and parts.
• Requirements for different resources and capabilities.
6–50
WEIGHING THE PROS AND CONS
OF VERTICAL INTEGRATION
• Can vertical integration enhance the performance
of strategy-critical activities in ways that lower
cost, build expertise, protect proprietary know-
how, or increase differentiation?
• What is the impact of vertical integration on

investment costs, flexibility and response times,
and administrative costs of coordinating
operations across more vertical chain activities?
• How difficult it will be for the firm to acquire the

set of skills and capabilities needed to operate in
another stage of the vertical chain?
6–51
AMERICAN APPAREL’S VERTICAL

• What are the most important strategic benefits
that American Apparel derives from its vertical
Integration strategy?
• Over the long term, how could the vertical scope

of American Apparel’s operations threaten its
competitive position and profitability?
• Why is a vertical integration strategy more

appropriate in some industries and not in
others? 6–52
Outsourcing involves contracting

out certain value chain activities
to outside vendors.
6–53
OUTSOURCING STRATEGIES: NARROWING

THE SCOPE OF OPERATIONS
• Outsourcing
– Involves farming out value chain activities to outside vendors.
• Outsource an activity if it:

– Can be performed better or more cheaply by outside
specialists.
– Is not crucial to achieving sustainable competitive advantage.
– Improves organizational flexibility and speeds time to
market.
– Reduces risks due to new technology and/or buyer
preferences.
– Assembles diverse kinds of expertise speedily and efficiently.
– Allows the firm to concentrate on its core business, leverage
key resources, and do even better what it does best.
6–54
THE BIG RISKS OF OUTSOURCING
VALUE CHAIN ACTIVITIES

• Hollowing out resources and capabilities that the
firm needs to be a master of its own destiny.
• Loss of control when monitoring, controlling, and

coordinating activities of outside parties by means
of contracts and arm’s-length transactions.
• Lack of incentives for outside parties to make

investments specific to the needs of the outsourcing
firm’s value chain.
6–55
A company must guard against

outsourcing activities that hollow out
the resources and capabilities that it
needs to be a master of its own
destiny.
6–56
• A strategic alliance is a formal agreement

between two or more separate companies in
which they agree to work cooperatively toward
some common objective.
• A joint venture is a partnership involving the

establishment of an independent corporate
entity that the partners own and control jointly,
sharing in its revenues and expenses.
6–57
FACTORS THAT MAKE AN
ALLIANCE “STRATEGIC”
• It facilitates achievement of an important business
objective.
• It helps build, sustain, or enhance a core competence or
• It helps block a competitive threat.
• It helps remedy an important resource deficiency or
competitive weakness.
• It increases the bargaining power of alliance members
over suppliers or buyers.
• It helps open up important new market opportunities.
• It mitigates a significant risk to a firm’s business.
6–58
BENEFITS OF STRATEGIC
ALLIANCES AND PARTNERSHIPS

• Minimizes the problems associated with vertical
integration, outsourcing, and mergers and
acquisitions.
• Useful in extending to extend the scope of operations
via international expansion and diversification
strategies.
• Reduces the need to be independent and self-sufficient
when strengthening the firm’s competitive position.
• Offers greater flexibility should a firm’s resource
requirements or goals change over time.
• Are useful when industries are experiencing high-
velocity technological advances simultaneously.
6–59
Companies that have formed a host of

alliances need to manage their
alliances like a portfolio.
6–60
COMPANIES THAT HAVE FORMED A HOST
OF ALLIANCES NEED TO MANAGE THEIR

ALLIANCES LIKE A PORTFOLIO
• They expedite the development of promising
new technologies or products.
• They help overcome deficits in technical and
manufacturing expertise.
• They bring together the personnel and expertise
needed to create new skill sets and capabilities.
• They improve supply chain efficiency.
• They help partners allocate venture risk sharing.
• They allow firms to gain economies of scale.
• They provide new market access for partners.
6–61
• The best alliances are highly selective,

focusing on particular value chain
activities and on obtaining a specific
competitive benefit.
• They enable a firm to build on its

strengths and to learn.
6–62
REASONS FOR ENTERING INTO
STRATEGIC ALLIANCES
• When seeking global market leadership:
• Enter into critical country markets quickly.
• Gain inside knowledge about unfamiliar markets and
cultures through alliances with local partners.
• Provide access to valuable skills and competencies
concentrated in particular geographic locations.
• When staking out a strong industry position:
• Establish a stronger beachhead in target industry.
• Master new technologies and build expertise and
competencies.
• Open up broader opportunities in the target industry. 6–63
CAPTURING THE BENEFITS OF
STRATEGIC ALLIANCES
Being
sensitive to
cultural
differences Recognizing
that the
alliance must
Picking a good benefit both
partner sides
Strategic
Alliance
Factors
Adjusting the
agreement
Ensuring both over time to
parties keep fit new
their circumstances
commitments
Structuring
the decision-
making
process for
swift actions
6–64
THE DRAWBACKS OF STRATEGIC
ALLIANCES AND PARTNERSHIPS
• Culture clash and integration problems due to

different management styles and business practices.
• Anticipated gains do not materialize due to an overly
optimistic view of the synergies or a poor fit of
partners’ resources and capabilities.
• Risk of becoming dependent on partner firms for
essential expertise and capabilities.
• Protection of proprietary technologies, knowledge
bases, or trade secrets from partners who are rivals.
6–65
PRINCIPLE ADVANTAGES OF
STRATEGIC ALLIANCES
• They lower investment costs and risks for

each partner by facilitating resource pooling
and risk sharing.
• They are more flexible organizational forms
and allow for a more adaptive response to
changing conditions.
• They are more rapidly deployed—a critical
factor when speed is of the essence.
6–66
STRATEGIC ALLIANCES VERSUS
OUTSOURCING
• Key Advantages of Strategic Alliances:
– The increased ability to exercise control over
the partners’ activities.
– A greater commitment and willingness of the
partners to make relationship-specific
investments as opposed to arm’s-length
outsourcing transactions.
6–67
HOW TO MAKE STRATEGIC
ALLIANCES WORK
• Create a system for managing the alliance.
• Build trusting relationships with partners.
• Set up safeguards to protect from the threat of
opportunism by partners.
• Make commitments to partners and see that
partners do the same.
• Make learning a routine part of the
management process.
6–68

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Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.

For Even Roll Numbers:

For Odd Roll Numbers:

• Write your Name, Roll Number on top of the page

Q1. For Even Roll Numbers:

Q1. For Odd Roll Numbers:

Thompson | Peteraf | Gamble | Strickland | Jain

 Timing, ….And Single Business

DEFENSIVE STRATEGIC MOVES

 Moving first is no guarantee of success or

 The risks of moving first to stake out a

 Integration – Forward and Backward

 Diversification - Related and Unrelated tions

 JVs or Deep Partnerships, Exclusive Partnerships Comp

• Reasons for Integrating Backwards:

Alliances and Partnerships

• A joint venture is a partnership involving the

OUTSOURCING STRATEGIES: NARROWING

• Outsource an activity if it:

• Started 75 years back as two man show – now a

• Hived Off/ Exited : Cement (Birla), Tractor(JD), Ready-mix

Making choices that complement

Offensive and Competitive Scope of

STRATEGIC OPTIONS TO IMPROVE A

Sometimes a company’s best strategic

• Use the firm’s strongest strategic assets to

• The offensive may not yield immediate results

• Be prepared for the threatened competitor’s

The best offensives use a company’s

Market leaders Runner-up firms

GILT GROUPE’S BLUE-OCEAN STRATEGY

• Is Gilt Groupe a “one-trick pony” business that

• How critical is timing to first-mover advantage?

A blue-ocean strategy offers growth

Good defensive strategies can help

MARKET POSITION AND COMPETITIVE

Purposes of Defensive Strategies

Weaken the impact Influence challengers

Because of first-mover advantages

DEFENSIVE STRATEGIC MOVES

TO BE A FIRST MOVER OR NOT

AMAZON.COM ’S FIRST-MOVER ADVANTAGE

• Which first-mover advantages did Jeff Bezos

• What first-mover disadvantages did Bezos

• Why was the learning curve so steep for

POSITION VIA ITS SCOPE OF OPERATIONS

Defining the Scope of

• Horizontal scope is the range of product and

• Vertical scope is the extent to which a firm’s

MERGERS AND ACQUISITIONS

BRISTOL-MYERS SQUIBB’S “STRING-OF-PEARLS”

• Why did Bristol-Myers Squibb choose to pursue a

• How did increasing the horizontal scope of Bristol-

SOMETIMES FAIL TO PRODUCE ANTICIPATED

A vertically integrated firm is one

• Is one that participates in multiple segments

• Vertical Integration Strategy.

• Can expand the firm’s range of activities