SHR 247 (7) - 1 Chapter 6: Multiproduct Strategies...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1 Chapter 6: Multiproduct Strategies Multiproduct Strategies 2 A multiproduct strategy is an action plan the firm uses to compete in different product markets. Using a multiproduct strategy causes a firm to become more diversified Primary reason for multiproduct strategies is to improve their performance Multiproduct strategies result in performance improvements when their use allows firms to create operational relatedness, corporate relatedness, or financial economies 2 very different examples: Google http://www.youtube.com/watch? v=_nOBa0z1BHk&feature=related McDonalds http://www.youtube.com/watch?v=FcD-Fn-LzU0 2 major issues in Multiproduct/ Diversification Strategies 4 What products or services will the firm produce and sell? How will the firm manage the different units it creates to produce and sell its products and services? Making multiproduct/ diversification work Or in other words: What business should the corporation compete in? How should these units be managed to jointly create more value than if they were freestanding units Reasons firms use multiproduct strategies to diversify Achieve profitable growth Reduce the risk of being involved with a single product line Learn how to apply core competencies in other value creating ways Gain exposure to different technologies Develop economies of scope Extend the firms brand into additional product areas Diversification what is it? Ramanujam & Varadarajan (1989) : the entry of a firm or business unit into new lines of activity, either by process of internal business development or acquisition, which entail changes in its administrative structure, systems, and other management processes. Can be: Product diversification Proctor and Gamble (Toothbrushes + Toothpaste) Geographic diversification Expansion to foreign countries Diversification...
View Full Document

Page1 / 28

SHR 247 (7) - 1 Chapter 6: Multiproduct Strategies...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online