Week_6_-_Corporate_Strategy[1]

Week_6_-_Corporate_Strategy[1] - BUS 690 BUS 690 3 4...

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1 3 3 BUS 690 G. Where we are… Business-Level Strategy Corporate-Level Strategy Introduction to Strategy External Environment Internal Environment Competitive Positioning Competitive Dynamics (Rivalry) Innovation & Entrepreneurship Diversification Mergers & Acquisitions Alliances International Strategy Corporate Governance 4 4 BUS 690 G. Desa Corporate Strategy 5 5 BUS 690 G. Corporate Strategy • 2 key questions of corporate strategy What businesses should we be in? How should these be managed? Walt Disney Co. Theme Parks Television Cruise Line Movie Production CORPORATE LEVEL BUSINESS LEVEL 6 6 BUS 690 G. Degrees of Diversification Low High Unrelated Single Business >95% Dominant Business 70%-95% Related sharing value chain 7 7 BUS 690 G. Desa “Directions” of Diversification • Horizontal – different businesses in similar stage of production-marketing chain • concentric diversification: businesses are highly related • conglomerate: businesses are unrelated • Vertical – extent to which firm owns input assets or output assets – forward vs. backward integration – make vs. buy 8 8 BUS 690 G. “Directions” of Diversification Computer Manuf. Bottling & Distribution Vertical Dimension Integrated Circuit Manuf. Beverage Syrup Production
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2 9 9 BUS 690 G. “Directions” of Diversification Wireless Handsets Rolling Stock (Rail Cars) Telecomm. Switches CT & PET Scanners Manuf. Horizontal Diversification 10 10 BUS 690 G. Desa • Diversification most effectively adds value by either of two mechanisms: – developing economies of scope scale between business units ( SYNERGY ) • firm achieves savings as it increases the variety of activities it performs, such as the variety of goods it produces
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This note was uploaded on 09/07/2011 for the course BUS 690 taught by Professor Amartinez during the Spring '10 term at S.F. State.

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Week_6_-_Corporate_Strategy[1] - BUS 690 BUS 690 3 4...

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