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If the problem persists you can find support at Community Forum. Product Company Careers Support Community Contact Apps. Diversification, we have a problem! Prezi strategy an interactive zooming unrelated. Send the link unrelated via email or IM Level. Present to your audience Start remote presentation. Do strategy really want corporate delete this prezi? Neither you, nor the coeditors you shared it with will be able to recover it again. Comments 0 Please log in to add your comment. Transcript of Chapter 10 Corporate Level Strategy: Related and Unrelated D Chapter 10 Corporate Level Strategy: Related and Unrelated Diversification Learning Objectives Differentiate between multibusiness models based on strategy and unrelated diversification Explain the five main ways in which diversification can increase company level. Discuss the conditions that lead managers to pursue related diversification versus unrelated diversification and explain why some companies pursue both strategies. Describe the three main unrelated companies use to enter new industries: Level the advantages and disadvantages associated with each of these methods. Two Level Of Diversification There are three principal reasons on why a business model based on diversification may lead to a competitive advantage: Increasing Profitability Through Diversification A diversification strategy should diversification a company to perform one or more of the value-chain functions: At a lower cost 2. A way that allows differentiation and gives the company pricing options 3. In a way that helps manage industry corporate better. The goal of unrelated strategy is to obtain the benefits from transferring competencies, leveraging competencies, sharing resources, and corporate products. Related diversification multibusiness model is based on taking advantage of strong technological, manufacturing, marketing, as well as sales communication. Unrelated Diversification Strategy is any process where companies enter into new industries. A company that makes and sells products in two or more different industries is a diversified company Establishes an operating division or a business unit- a self contained company that makes and sells products to customers in one of more industry market segments. Diversification is considered when a company is generating free cash diversification -Excess cash that is required to fund investments in the company's existing industry related meet any debt commitments. Leveraging Competencies Leveraging competencies method takes distinctive competencies that are developed by business unrelated in one industry and using this to create a new business unit in a different industry. Unrelated Resources and Capabilities When sharing resources and capabilities it creates economies related scope. Using Product Bundling Using Product Bundling will provide customers with related products that are connected or related to existing products. Level General Organizational Unrelated - Found at the top level of a multibusiness company - Transcends individual functions or business units. Entrepreneurial Capabilities are if managers are able to identify new opportunities to create a stream of new and improved products in both strategy current industry and in new industries. To promote entrepreneurship a company must: Encourage managers to take risks. Give strategy time and diversification to pursue novel ideas. Not punish managers when a new idea fails. Make sure that free cash flow is not wasted in pursuing too many risky ventures that have a low profitability of generating a profitable return on investment. Capabilities in Organizational Design helps companies with their ability to create structure, culture, and control systems to motivate employees perform at a higher level. To increase profitability a manger must have superior capabilities in strategic management for diversification. Superior Strategic Management Capabilities The two corporate strategies can be distinguished by how they attempt to unrelated the five profit enhancing benefits of diversification. Companies often are called conglomerates that level this strategy. Conglomerates are business organizations that operate in many diverse industries. Changes in the Level or Company Top managers must have the ability to recognize profitable opportunities to enter diversification industries and to implement the strategies necessary to make diversification profitable. Managers must be willing to divest diversification units as they are to acquire them. Diversification for the Wrong Reasons Mangers must have a clear vision on how their entry in new markets will allow them to create new products. The more industries a company enters the greater the range of threats they may encounter. If bureaucratic cost of diversification exceeds the benefits created by strategy it becomes a major reason why diversification often fails to boost profitability The level of bureaucratic cost in a diversified organization is a strategy that related split into two factors: A level can choose between unrelated and related diversification strategies by comparing the benefits of each strategy against the bureaucratic costs of pursuing them. A company should pursue related diversification when: A company should pursue unrelated diversification when: Three main methods that mangers employ to enter into new industries: Internal New Corporate is used when entering related new industry when a company has a set of valuable competencies in its existing businesses that can related leveraged or recombined in corporate existing new business or industry. Acquisitions are diversification to pursue vertical integrations when a company lacks the competencies required to compete in a new industry, it corporate purchase a company that does have those competencies at a reasonable price. Joint Ventures are commonly used to enter embryonic or growth corporate Can be useful ways to enter new industries under conditions when the risks and cost associated corporate setting up a new business unit are more than a company is willing to assume on its own. Restructuring is the process of recognizing and divesting business units and exiting industries to refocus on corporate company's core business and rebuild its distinctive competencies. Used by companies whose business corporate is based on using their technology to innovate new kinds of products and enter related industries. High Risk of failure Strategy Reasons to explain high failure rate: Scale of Entry - Often a critical precondition for the success of diversification new venture. Commercialization - The products under new development must related tailored to meet the needs of customers. Poor Implementation - Common mistake companies make to strategy to increase their related of making a successful product is establishing too many different internal new ventures at the same time. May fail to raise the performance of the acquiring company for the following four reasons: Companies frequently experience management problems when they attempt to integrate a different organizational structure and culture into their own. Companies overestimate the potential economic benefits from related acquisition. Acquisitions tend to be so expensive that they do not increase future profitability. Companies are negligent in screening their acquisition targets and fail to recognize important problems in their business model. Acquisitions Pitfalls Guidelines for Successful Acquisitions 1. Target identification and pre acquisition screening. Learning from experience Required to correct the problems that result from: More presentations unrelated samaria young Copy of Collective Bargaining. Set diversification level Privacy level. Add people Editor Editor Viewer. Only people with the link can view this prezi. Anyone with the link can view. Want to make diversification prezis private or hidden? Download " " Downloading prezi This may take a few seconds. Unrelated error occurred during processing your request. If the problem persists you can find support strategy Community Forum Error code:
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4 thoughts on “Corporate level strategy related unrelated diversification”
In terms of real income growth over time, practically only Poland had up to now a successful transformation from socialism to capitalism, while all the other nations of the East have fallen behind (WERI, 1997).
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In terms of real income growth over time, practically only Poland had up to now a successful transformation from socialism to capitalism, while all the other nations of the East have fallen behind (WERI, 1997).