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CORPORATE STRATEGY (DIVERSIFICATION). RELATED – STRATEGIC FIT, “THEME” UNRELATED (What is theme?) VERTICAL HORIZONTAL. DIVERSIFICATION Motives to Strengthen Competitiveness. SHARING ACTIVITIES TRANSFERING CORE COMPETENCIES BLOCKING COMPETITORS VERTICAL INTEGRATION
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CORPORATE STRATEGY(DIVERSIFICATION) • RELATED – STRATEGIC FIT, “THEME” • UNRELATED (What is theme?) • VERTICAL • HORIZONTAL
DIVERSIFICATIONMotives to Strengthen Competitiveness • SHARING ACTIVITIES • TRANSFERING CORE COMPETENCIES • BLOCKING COMPETITORS • VERTICAL INTEGRATION • EFFICIENT INTERNAL USE OF CAPITAL • BUSINESS RESTRUCTURING • FINANCIAL • ORG. DESIGN
DIVERSIFICATIONNeutral Effects? • ANTI-TRUST REGULATION • TAX LAWS • LOW PERFORMANCE • UNCERTAIN FUTURE CASH FLOW • RISK REDUCTION • TANGIBLE, INTANGIBLE RESOURCES
DIVERSIFICATION“Managerial” Motives? • DIVERSIFY MANAGERIAL EMPLOYMENT • INCREASING SALARY