Ch6 - The Management of Strategy (Concepts and Cases) Part...

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1 The Management of Strategy (Concepts and Cases) Part II: Strategic Actions: Strategy Formulation Chapter 6: Corporate-Level Strategy
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2 The Strategic Management Process
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3 Chapter 6: Corporate-Level Strategy Overview: Seven content areas Define and discuss corporate-level strategy Different levels of diversification (N=3) Three primary reasons firms diversify Value creation: related diversification strategy Value creation: un related diversification strategy Incentives and resources encouraging diversification Mgmt motives encouraging firm overdiversification
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4 Procter & Gamble’s Diversification Strategy Purpose of diversification: Use expertise and knowledge gained in one business by diversifying into a business where it can be used in a related way Builds synergy: value added by corporate office adds up to more than the value if different businesses in the portfolio were separate and independent Procter & Gamble (P&G) Product mix: beauty products targeting women and baby care products 2005: Acquired Gillette (consumer health care products) focused on masculine market
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5 Procter & Gamble’s Diversification Strategy Procter & Gamble (P&G) (Cont’d) Synergy created with combining toothbrush and toothpaste businesses Had to sell off product lines with Gillette acquisition, lost some prospective market power Good for retailers (shelf space) Although strategy appeared to have potential, it was more difficult to create actual operational relatedness between the products Comingle employees requiring actual physical re-location/talent exit Different ways to make business decisions Conflicting organizational cultures
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6 Chapter 6: Corporate-Level Strategy Overview: Seven content areas Define and discuss corporate-level strategy Different levels of diversification Three primary reasons firms diversify Value creation: related diversification strategy Value creation: un related diversification strategy Incentives and resources encouraging diversification Management motives encouraging firm overdiversification
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7 Introduction Corporate-level strategy: Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses
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This note was uploaded on 06/26/2011 for the course BUS 478 taught by Professor N/a during the Spring '09 term at Simon Fraser.

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Ch6 - The Management of Strategy (Concepts and Cases) Part...

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