strategic mgt Session 09 - Corporate Level I

strategic mgt Session 09 - Corporate Level I - MGT 4195...

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MGT 4195 Strategic Management Fall 2010 Shanti D. Agung Georgia Institute of Technology
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What is corporate level strategy? 2 What function does it serve? Source: Hills, C., & Jones, G. Strategic Management. 2008. Houghton Mifflin Company.
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Corporate-Level Strategy: Central Questions s What business should the company compete in? s What value creation activities should a company perform in those businesses? 3 s What are the methods to enter or leave businesses in order to maximize its long-run profitability? Source: Hills, C., & Jones, G. Strategic Management. 2008. Houghton Mifflin Company.
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Corporate-Level Strategy Single Industry Multiple Industry Existing Business •Horizontal Integration •Strategic Outsourcing •Vertical Integration •Strategic Outsourcing 4 New Business Diversification
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2008 2005 5 2010 2010
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Benefits to horizontal integration s Reducing costs s Increasing value roduct bundling 6 s Product bundling s Cross selling s Managing industry rivalry s Increasing bargaining power s Market power (monopoly power) Source: Hills, C., & Jones, G. Strategic Management. 2008. Houghton Mifflin Company.
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Drawbacks to horizontal integration s Majority of mergers and acquisitions do not create value WHY?? plementing a horizontal integration strategy is not 7 s Implementing a horizontal integration strategy is not easy s Mergers and acquisitions often fail to produce the
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strategic mgt Session 09 - Corporate Level I - MGT 4195...

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