Question

Provide examples of when each of the four business-level cooperative strategies and the three corporate-level strategies might be used to expand a firm's operations and develop competitive advantage.

Discuss how the Fed's balance sheet has changed over time since the crisis of 2007. Briefly explain some of the asset and liability changes

Answer 1

There are four business level cooperative strategies. It includes:

a) Vertical integration

b) Horizontal integration

c) Joint Venture

d) Conglomerate Diversification

Recently Amazon has also started publishing books. It is an example of vertical integration.

Google purchased youtube. It is an example of horizontal integration.

Many companies join hands together for a particular project. For Example, Sony Ericsson

Berkshire Hathaway Inc is an example of Conglomerate. Under this method, a large company purchases many small companies. This new large company is called parent company and small companies are called subsidiaries.

In 1985, Horward University Professor Michael Porter recommended three primary ways to increase a firm's competitive advantage.

a) Cost Leadership: If a firm is able to provide same quality product at cheaper rates then firm can afford to supply it at prices lesser than that of their competitors. It would lead to increase in their market share and they will avail of Economies of large scale.

b) Differentiation: If a firm can provide some unique features in the product, they can grab a big market share. It is possible through expenditure on Research and development.

c) Focus: It implies that a firm needs to focus on market changes, be cautious of their strengths, weaknesses, opportunities and threats. They need to focus on needs of their target market. They need to understand pshychology of their customers.