21download_doc-10.php - J370Session9...

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J370 Session 9 Corporate Diversification Class Session #9 – Tuesday, September 29 Dr. Siri Terjesen  Let’s go to Disney… Diversification and Expansion of Business Scope at Disney  The Strategic Management Process Logic of Corporate Level Strategy Corporate level strategy should create value: 1) such that businesses forming the corporate whole are worth more than they would be  under  independent ownership 2) that equity holders cannot create through portfolio investing  Therefore, a corporate level strategy must create synergies between divisions that create value that  couldn’t be created by independent ownership    (economies of scope – diversification) Integration and Diversification Virgin founded by Richard Branson  Types of Corporate Diversification Five Types of Corporate Diversification Related Constrained or Linked? Relatedness refers to product diversification. BIC – disposable razors, cigarette lighters, and pens  Related constrained because products share plastic injection molding, retail distribution, and  brand name. Newell Rubbermaid – cleaning products, home and family, home fashions, office products,  Related linked because all share common distribution channels, but sold under different brand  names (Sharpie, Levolor) and do not share technology. Diversification Strategy Typology 
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21download_doc-10.php - J370Session9...

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