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Premises Of Corporate Strategy

Premises Of Corporate Strategy. Competition Occurs Only at the Business Unit Level. Premises Of Corporate Strategy. Competition Occurs Only at the Business Unit Level Diversification Inevitably Adds Costs and Constraints to Business Units. Premises Of Corporate Strategy.

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Premises Of Corporate Strategy

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  1. Premises Of Corporate Strategy • Competition Occurs Only at the Business Unit Level

  2. Premises Of Corporate Strategy • Competition Occurs Only at the Business Unit Level • Diversification Inevitably Adds Costs and Constraints to Business Units

  3. Premises Of Corporate Strategy • Competition Occurs Only at the Business Unit Level • Diversification Inevitably Adds Costs and Constraints to Business Units • Shareholders Can Readily Diversify Themselves

  4. Passing the Essential Tests • The Attractiveness Test

  5. Passing the Essential Tests • The Attractiveness Test • The Cost-of-Entry Test

  6. Passing the Essential Tests • The Attractiveness Test • The Cost-of-Entry Test • The Better-off Test

  7. Concepts of Corporate Strategy • Portfolio Management --Acquire sound, attractive companies with competent mangers who stay --Companies are autonomous --Requires good but undervalued companies --Essentially an LBO concept with a “conglomerate discount” for public companies

  8. Concepts of Corporate Strategy • Restructuring --Underdeveloped, sick, or threatened organizations or industries on the threshold of significant change --Parent intervenes frequently changing the management team, shifting strategy, or infusing the company with new technology --Business is sold when parent is no longer adding value

  9. Concepts of Corporate Strategy • Transferring skills --Knowledge about how to perform activities is transferred among the units --Characterized by units with similar buyers, channels, value activities and/or the same strategic concept --Expertise must be a meaningful source of competitive advantage

  10. Concepts of Corporate Strategy • Sharing activities --Leads to lowering costs or raising differentiation --Must involve activities that are significant to competitive advantage and costs outweighed by benefits --Business unit collaboration is encouraged and reinforced

  11. Concepts of Corporate Strategy • Portfolio Management • Restructuring • Transferring Skills • Sharing Activities

  12. An Action Program • Identify Interrelationships Among Units

  13. An Action Program • Identify Interrelationships Among Units • Select Core Business

  14. An Action Program • Identify Interrelationships Among Units • Select Core Business • Facilitate Interrelationships

  15. An Action Program • Identify Interrelationships Among Units • Select Core Business • Facilitate Interrelationships • Diversify Via Shared Activities

  16. An Action Program • Identify Interrelationships Among Units • Select Core Business • Facilitate Interrelationships • Diversify Via Shared Activities • Diversify Via Transfer of Skills

  17. An Action Program • Identify Interrelationships Among Units • Select Core Business • Facilitate Interrelationships • Diversify Via Shared Activities • Diversify Via Transfer of Skills • Diversify Via Restructuring

  18. An Action Program • Identify Interrelationships Among Units • Select Core Business • Facilitate Interrelationships • Diversify Via Shared Activities • Diversify Via Transfer of Skills • Diversify Via Restructuring • Pay Dividends Instead

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