CPA Australia GSL flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Global integration vs local responsiveness

The core tension in international strategy: integration pressures favour standardised global products and scale economies, while responsiveness pressures require adaptation to local customer needs, regulation, and distribution.

Four international strategies

Multi-domestic (high responsiveness, low integration), global (low responsiveness, high integration), transnational (both high, via differentiated network), and international (low both, exporting home capabilities).

Transnational strategy logic

Combines global efficiency, local responsiveness, and worldwide learning by dispersing capabilities across subsidiaries while centralising core resources and coordinating through shared values and lateral networks.

Integration-responsiveness grid

A two-axis framework plotting industries by pressure for global integration and pressure for local responsiveness; position determines which of the four international strategies is viable.

Porter's Five Forces

Assesses industry profit potential through rivalry, buyer power, supplier power, threat of new entrants, and threat of substitutes; strong forces compress returns toward competitive parity.

VRIO sustained advantage test

A resource must be valuable, rare, costly to imitate, and supported by organisation; failure on any attribute caps advantage at parity, temporary, or unrealised respectively.

Cost leadership strategy

Achieving lowest total cost position through scale, process efficiency, and overhead control while offering acceptable value, allowing above-average returns even at industry-average prices.

Differentiation strategy

Commanding premium prices through unique attributes valued by buyers; sustainable only if the price premium exceeds the added cost of delivering the uniqueness.

Stuck in the middle

A position lacking both cost advantage and sufficient differentiation, producing below-average profitability because rivals with clear strategies capture both price-sensitive and value-sensitive segments.

Ansoff growth matrix

Classifies growth options by product and market newness: penetration, product development, market development, diversification; risk rises with newness on either dimension.

Related diversification test

Justified when businesses share resources, capabilities, or value-chain activities that create economies of scope exceeding the costs of coordination and added complexity.

Corporate parenting advantage

The parent creates value when its central resources and linkages benefit units more than the costs of hierarchy, coordination, and loss of unit autonomy.

Dynamic capabilities

Sensing opportunities, seizing them through investment and business models, and transforming the resource base to sustain advantage as markets shift.

PESTLE analysis

Scans political, economic, social, technological, legal, and environmental forces; useful only when each factor is traced to a specific demand, cost, or competitive consequence.

Stakeholder salience

A stakeholder's priority depends on power, legitimacy, and urgency; possessing all three makes a stakeholder definitive and demands immediate managerial attention.

Corporate governance in strategy

Board oversight aligns strategy with shareholder and stakeholder interests through independent directors, audit and risk committees, and disclosure that constrains managerial discretion.

Strategy hierarchy

Corporate sets portfolio and scope, business units set competitive positioning, functional levels align operations; inconsistency across levels is a frequent source of execution failure.

Value chain margin

The gap between buyer willingness to pay and the total cost of all value activities; widening it requires reconfiguring activities, not merely trimming overhead.

Industry life cycle stages

Introduction, growth, maturity, decline; each shifts the relative weight of product innovation, scale efficiency, price competition, and capacity rationalisation.

Entry barriers

Structural features such as scale economies, capital intensity, switching costs, proprietary technology, regulation, and retaliation reputation that deter or delay new competitors.

Blue ocean strategy

Creating uncontested market space by reconstructing industry boundaries and pursuing differentiation and low cost simultaneously through value innovation.

Balanced scorecard

Translates strategy into financial, customer, internal process, and learning perspectives, linking objectives through cause-and-effect assumptions and measurable targets.

PESTLE factor relevance rule

A macro factor belongs in analysis only when it changes demand, cost, or competitive position; otherwise it is background description with no strategic decision value.

Network effects

Value to each user rises with the number of users; strong network effects create winner-take-most markets and raise barriers by shrinking viable rival scale.

First-mover advantage

Early entry gains from pre-empting scarce resources, setting standards, and building switching costs; offset by follower advantages in free-riding and learning from pioneer errors.

Market commonality and resource similarity

Competitive rivalry intensifies when firms share many markets and possess similar resource endowments, raising the likelihood and impact of competitive attacks.

Awareness-motivation-capability framework

Competitive response depends on a rival's awareness of the action, motivation to retaliate, and capability to do so; all three must be present for retaliation.

Strategic group mapping

Groups firms by strategic dimensions such as price, breadth, and channel; rivalry is strongest within groups and mobility barriers protect group positions.

Resource-based view assumptions

Resources are heterogeneous across firms and imperfectly mobile; these two conditions allow resource differences to persist and generate sustained performance differences.

Economies of scope

Unit costs fall as the range of outputs grows because shared inputs, distribution, or capabilities are spread across more products or businesses.

Global standardisation drivers

Universal customer needs, global competitors, scale economies, and low transport or trade barriers push toward integrated, standardised global product strategies.

Local responsiveness drivers

Differences in customer tastes, infrastructure, distribution channels, government regulation, and trade policy push toward adapting products and operations by country.