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Chapter 10 corporate level strategy-1

Chapter 10 corporate level strategy-1 - Chapter 10...

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    Chapter 10:  Corporate Level  Strategy with Related and  Unrelated Diversification
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    Corporate Level Strategy Remember: “What businesses should we be in?” What value creation activities? How to maximize l-run profitability? UTC case of unrelated diversification for value-added
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    Diversification Diversification Strategy: A company’s decision to enter one or more new industries (that are distinct from its established operations) to take advantage of distinctive competencies in the business model Allows companies to go beyond existing industry Types of diversification: Related diversification Unrelated diversification
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    Hamel & Prahalad:  How to build a  portfolio of distinctive competencies?
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    Increasing Profitability Through  Diversification In each industry a company enters, it establishes a self-contained operating division or business unit. A diversified company can create value by: 1.Transferring competencies across industries Philip Morris/Miller Brewing 2.Leveraging competencies- a new business is created
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