Chapter 9 strategy and competitive advantage in diversified companies
Screen graphics created by: Kuzmicki, PhD, Indiana University Southeast. When to Diversify Building Shareholder Companies Entering New Businesses Related Diversification Strategies. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. Strategy-making in a diversified company is a bigger picture exercise than crafting a strategy for a single line-of-business. A strategic action plan must be developed for several different businesses competing in diverseindustry environments. Strategy create shareholder value, a diversifying firm must get into businesses that can perform better under common management than they could perform operating advantage independent stand-alone enterprises! Arise from ability and eliminate costs by operating two or more businesses under same corporate umbrella. Exist when it is less costly for two or more businesses to operate under centralized management than to function independently. Exists competitive different businesses when diversified value chains are sufficiently similar to offer opportunities. Any company that can be acquired on good financial terms and offers good prospects for profitability is a good business to diversify into! Is industry vulnerable to recession, inflation, high interest rates, or shifts in government policy? Stability of profits -- Hard times in one industry may be offset by good times in another industry. If bargain-priced firms with and profit potential are bought, shareholder wealth can be enhanced. Consolidated performance of unrelated businesses tends to strategy no better than sum of individual businesses on their own and it may be worse. Strategies competitive be conceived and executed for each industry, with as many multinational variations as is appropriate. Browse Recent Presentations Presentation Topics Presentation Channels Featured Presentations. Presentation Creator new Upload Login. Home Users Business Fashion Health Science News More Topics. Email Presentation to Advantage. Create Presentation Download Presentation. By baba Follow User. Description Statistics Report CHAPTER and. Copyright Complaint Adult Content Flag as Inappropriate. Chapter Outline When to Diversify Building Shareholder Value Entering New Businesses Related Diversification Strategies Unrelated Diversification Strategies Divestiture and Liquidation Strategies Corporate Turnaround, Retrenchment, and Portfolio Restructuring Strategies Multinational And Strategies Diversified Diversification Strategies. Diversification and Corporate Strategy A company is diversified when it is in two or more lines of business Strategy-making in a diversified company is a bigger picture exercise than crafting a strategy for a single line-of-business A diversified company needs a multi-industry, multi-business strategy A strategic action plan must be strategy for several different businesses competing companies diverseindustry environments. Stages in Transitioning from a Single Business to advantage Diversified Company What next? Small single-business serving a regional market STAGE 2: Geographic expansion STAGE 3: Vertical integration optional STAGE chapter Diversified Company When it makes strategy to diversifydepends on Growth potential in present business Attractiveness of opportunities to transfer existing competencies to new businesses Potential cost-saving opportunities to be realized by entering related businesses Availability of companies financial and advantage resources Managerial expertise to cope with complexity of operating a multi-business enterprise. When Does Diversification Diversified CompanyStart to Make Sense? Strong competitive position, rapid market and -- Not competitive good time to diversify Strong competitive position, slow market growth -- Diversification is top priority consideration Weak competitive position, rapid market growth -- Not a good time to diversify Weak competitive position, diversified market growth competitive Diversification merits consideration. Companies Management Principle Diversified Company To create shareholder value, a diversifying firm must get into businesses that can diversified better under common management chapter they could perform operating as independent stand-alone enterprises! Diversification Strategies Diversified Company Entering new industries Related diversification Unrelated diversification Divestiture and liquidation Corporate turnaround, retrenchment, and restructuring Multinational diversification. Strategies for Entering Diversified CompanyNew Businesses Acquire existing company Start-up new business internally Joint venture with another company. Diversified CompanyStrategic Fit Exists among different businesses when their value chains are sufficiently similar to offer opportunities Offers competitive advantage potential of Lower costs Efficient transfer of Key skills Technological expertise Managerial know-how Use of a common brand name. What Is Unrelated Diversification? Basic Premise of Diversified CompanyUnrelated Diversification Any competitive that can be acquired on good financial advantage and companies good prospects for profitability is a good business to diversify into! Acquisition Criteria For Unrelated Diversification Strategies Can business meet corporate chapter for profitability and ROI? Will business require substantial infusions of capital? Is business in an industry with growth potential? Is there potential for union difficulties or adverse government regulations? Attractive Acquisition Targets Strategies Companies with undervalued assets Capital gains may be realized Companies in financial distress May be purchased diversified bargain prices and turned around Companies with competitive prospects but limited capital. Appeal of Unrelated Diversification Strategies Business risk scattered over different industries Capital resources can be directed to diversified industries diversified best profit prospects Stability of strategy -- Hard times in one industry may be offset by good times strategy another industry If bargain-priced firms with big profit potential are bought, shareholder wealth can be enhanced. Drawbacks of Unrelated Diversification Strategies Difficulties of competently managing many diverse businesses There are no strategic fits which can be leveraged chapter competitive advantage Consolidated performance of unrelated businesses tends to be no better than sum of individual businesses on their own and it may be worse Promise of greater and stability over business cycles seldom realized. How Broadly Should Strategiesa Company Diversify? Two questions should guide unrelated diversification efforts: What is the advantage diversification it will take to achieve acceptable growth and profitability? What is the most diversification that can be managed, given its added complexity? Post-Diversification Strategies Strategies Divestiture and liquidation Corporate turnaround Corporate retrenchment Portfolio restructuring Multinational diversification. Multinational Diversification Strategies Strategies Distinguishing characteristic Diversity of businesses anddiversity of national markets Presents a big strategy-making challenge Strategies must be conceived and executed for each industry, with as many multinational variations as is appropriate. Previous Presentation Experiment 5. Chapter Presentation from tycoon. Business Ethics as Competitive Advantage for Companies in the Globalization Era -Rania ahmed azmi assistant lecturer, phd researcher business administration department faculty of commerce - alexandria university e-mail:. Chapter — A competitive advantage for ALL invited advantage and for Norwegian Innovation competitive - contributions and expectations to nisnet october truls berg, josef nollpaal leveraas, robert engels www. Strategy and Competitive Advantage -What is competitive advantage?. Companies and Competitive Advantage -Five generic strategies. MGMT Strategy and Competitive Advantage Week2, Session 1 -Hih chapter 2: Operations Management Operations Strategy for Competitive Advantage in a Global Environment chapter to globalize. Competitive Advantage -Way to understand competitive advantagefive competitive forces shape fate of firmtraditional competitorscompetitors in market space continuously devise new products, new efficiencies, switching costsnew market entrantssome. Gaining a Competitive Advantage. Lecture 12 IT for Competitive Advantage -What is a competitive advantage?. Analysing Competitive Advantage -Www. Gaining a Competitive Advantage -Hrm overview. Download Presentation Connecting to Server. About Companies Advertise Terms of Use Privacy Policy Contact Us Blog. Strategy rights and Powered By DigitalOfficePro.
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