Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Strategies and competitive advantage in diversified companies ppt

25/03/2021 Client: saad24vbs Deadline: 2 Day

CHAPTER 8 Corporate Strategy: Diversification and the Multibusiness Company

LEARNING OBJECTIVES

THIS CHAPTER WILL HELP YOU UNDERSTAND:

When and how business diversification can enhance shareholder value

How related diversification strategies can produce cross-business strategic fit capable of delivering competitive advantage

The merits and risks of unrelated diversification strategies

The analytic tools for evaluating a company’s diversification strategy

What four main corporate strategy options a diversified company can employ for solidifying its strategy and improving company performance

© McGraw-Hill Education.

WHAT DOES CRAFTING A DIVERSIFICATION STRATEGY ENTAIL?

Step 1 Picking new industries to enter and deciding on the means of entry
Step 2 Pursuing opportunities to leverage cross-business value chain relationships and strategic fit into competitive advantage
Step 3 Establishing investment priorities and steering corporate resources into the most attractive business units
© McGraw-Hill Education.

STRATEGIC DIVERSIFICATION OPTIONS

Sticking closely with the existing business lineup and pursuing opportunities presented by these businesses

Broadening the current scope of diversification by entering additional industries

Retrenching to a narrower scope of diversification by divesting poorly performing businesses

Broadly restructuring the entire firm by divesting some businesses and acquiring others to put a whole new face on the firm’s business lineup

© McGraw-Hill Education.

WHEN TO CONSIDER DIVERSIFYING

A firm should consider diversifying when:

Growth opportunities are limited as its principal markets reach their maturity and buyer demand is either stagnating or set to decline.

Changing industry conditions—new technologies, inroads being made by substitute products, fast-shifting buyer preferences, or intensifying competition—are undermining the firm’s competitive position.

© McGraw-Hill Education.

HOW MUCH DIVERSIFICATION?

Deciding how wide-ranging diversification should be

Diversify into closely related businesses or into totally unrelated businesses?

Diversify present revenue and earnings base to a small or major extent?

Move into one or two large new businesses or a greater number of small ones?

Acquire an existing company?

Start up a new business from scratch?

Form a joint venture with one or more companies to enter new businesses?

© McGraw-Hill Education.

OPPORTUNITY FOR DIVERSIFYING

Strategic diversification possibilities

Expand into businesses whose technologies and products complement present business(es).

Employ current resources and capabilities as valuable competitive assets in other businesses.

Reduce overall internal costs by cross-business sharing or transfers of resources and capabilities.

Extend a strong brand name to the products of other acquired businesses to help drive up sales and profits of those businesses.

© McGraw-Hill Education.

BUILDING SHAREHOLDER VALUE: THE ULTIMATE JUSTIFICATION FOR DIVERSIFYING

The industry attractiveness test

The cost-of-entry test

The better-off test

Testing Whether Diversification Will Add Long-Term Value for Shareholders

Jump to Appendix 1 long image description

© McGraw-Hill Education.

THREE TESTS FOR BUILDING SHAREHOLDER VALUE THROUGH DIVERSIFICATION

The attractiveness test

Are the industry’s profits and return on investment as good or better than present business(es)?

The cost of entry test

Is the cost of overcoming entry barriers so great as to long delay or reduce the potential for profitability?

The better-off test

How much synergy (stronger overall performance) will be gained by diversifying into the industry?

© McGraw-Hill Education.

Strategic Management Principle (1 of 9)

To add shareholder value, diversification into a new business must pass the three tests of corporate advantage

The industry attractiveness test

The cost of entry test

The better-off test

© McGraw-Hill Education.

Core Concept (1 of 15)

Creating added value for shareholders via diversification requires building a multibusiness company in which the whole is greater than the sum of its parts; such 1 + 1= 3 effects are called synergy.

© McGraw-Hill Education.

BETTER PERFORMANCE THROUGH SYNERGY

Evaluating the Potential for Synergy through Diversification

Firm A purchases Firm B in another industry. A and B’s profits are no greater than what each firm could have earned on its own.

Firm A purchases Firm C in another industry. A and C’s profits are greater than what each firm could have earned on its own.

No Synergy (1+1=2)

Synergy (1+1=3)

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Homework Guru
Assignment Hub
Quality Homework Helper
A Grade Exams
WRITING LAND
Essay & Assignment Help
Writer Writer Name Offer Chat
Homework Guru

ONLINE

Homework Guru

I will cover all the points which you have mentioned in your project details.

$44 Chat With Writer
Assignment Hub

ONLINE

Assignment Hub

Hello, I an ranked top 10 freelancers in academic and contents writing. I can write and updated your personal statement with great quality and free of plagiarism

$93 Chat With Writer
Quality Homework Helper

ONLINE

Quality Homework Helper

I have read your project details. I can do this within your deadline.

$98 Chat With Writer
A Grade Exams

ONLINE

A Grade Exams

I have read your project details. I can do this within your deadline.

$88 Chat With Writer
WRITING LAND

ONLINE

WRITING LAND

Give me a chance, i will do this with my best efforts

$110 Chat With Writer
Essay & Assignment Help

ONLINE

Essay & Assignment Help

I will cover all the points which you have mentioned in your project details.

$109 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Block and tackle frame - C bus income stream - Density of sae 30 oil at 20 c - ME - Online - Dis 3 - C12 15 alkyl benzoate dangers - What factors contributed to taco bell's early success - Unit 1 IP PC - The pedestrian ray bradbury analysis - Psychology + cyberpsych + interactive e-text code - Pom qm for windows version 4 - Ceres gardening company funding growth in organic products case solution - GOVT 480 RESEARCH PAPER OUTLINE DUE 9/28/2020 - Cond mat journal club - Political Science 101 - Evaluate your style with The pelle pelle jackets! - Problem 6 3a perpetual alternative cost flows lo p1 - Is anyone able to help please - Standard errors of measurement - Smart goal on Opioid crisis of California - Interview - Employee personal information form doc - PPT(Team Management) - Juvenile delinquents should be sentenced to bootcamp - Weiser lock shim pick - Art/discussion - prg -9 - On the balance sheet treasury stock is presented as a - ?same-day +27833173182 Mhlume - Lubombo ABORTION CLINIC // PILLS,,,, - One way manova spss - Agent loki international man of mayhem - Intercultural communication paper assignment - Meadows vet new deer - Five dimensions of entrepreneurial orientation - The outsiders book characters - Pascal's triangle even and odd - Different types of writing - Pyxis medstation es system station tutorial assessment for nursing answers - Variation in human skin color is a result of - Activity 7.1 - Discussion: Response - Some consequence yet hanging in the stars - Spice of india ballygawley - Wheat weight per cubic metre - Klip lok classic 700 - Mr peabody's apples cause and effect - Articulating your philosophy of nursing - MBA630 Application Assignment 1 - Wide range achievement test scoring - Methodology plan that will guide your research work. - Cost-Benefit Analysis for Solving Master Data Management Issues - IT BUDGET PLAN - Harcourt education ltd 2003 catalyst 1 answers - Com adobe acs commons email emailservice - Warranty direct reliability index 2016 - Difference between incomplete dominance and codominance - Point of view worksheet answers - Homework - Human Resource Legal Responsibilities - Flowchart for student information system - Leadership MG401 - Guild wars 2 error code 45 6 3 2157 - Vicente y francisco jugar al vóleibol los domingos - Ultimate frisbee lesson plan physical education - Duopoint Analysis Of ROE for two years - Al waqas medical practice - Immigrants in our own land commonlit answer key - Describing patterns using words - Corrs chambers westgarth ranking - Mary leal harkness - Brymore school term dates - The two hot air balloons in the drawing are - Paul frankenhauser - Bbccc baguio contact number - Refrigerant enters a compressor at kpa - Disadvantages of internal fertilisation - The north west telegraph - Assignment: Evidence-Based Project, Part 3: Advanced Levels of Clinical Inquiry and Systematic Reviews - Metacognitive forum - Professor layton and the miracle mask battle of wits - Similarities and differences between partnerships and sole proprietorships - A kg microwave oven is pushed - Essay writing - Owens transport lcl availability - Civil service fast stream assessment centre - Api 20e biomerieux - Fife direct school holidays - CASE STUDY - Marian plunket owns her own business - American business women's association - How to write a separation certificate - ProjectCharter-researchpaper - Directorate of secondary education - Example of soap note nurse practitioner - Biology of Mind - Quick write - The Executive Branch/ NO PLAGIARISM/ MUST BE ORIGINAL/ SCHOLARLY RESOURCES 2015/ - Specific heat of argon at constant volume is - Gel electrophoresis virtual lab answers quizlet - Pleasantville discussion questions - South coast skin and vein clinic