tailieunhanh - Lecture Organizational strategies for the 21st century - Chapter 6

Chapter 6 - Corporate-level strategy. Studying this chapter should provide you with the strategic management knowledge needed to: Define corporate-level strategy and discuss its purpose; describe different levels of diversification with different corporate-level strategies; explain three primary reasons firms diversify; describe how firms can create value by using a related diversification strategy;. | Chapter 6: Corporate-Level Strategy Overview: Define and discuss corporate-level strategy Different levels and types of diversification Three primary reasons firms diversify Value creation: related diversification strategy Value creation: unrelated diversification strategy Incentives and resources encouraging diversification Management motives for overdiversification Introduction Business-level Strategy An integrated and coordinated set of commitments and actions the firm uses to gain competitive advantage by exploiting core competencies in specific product markets Corporate-level Strategy Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets Expected to help firm earn above-average returns Value ultimately determined by degree to which “the businesses in the portfolio are worth more under the management of the company then they would be under any other ownership” . | Chapter 6: Corporate-Level Strategy Overview: Define and discuss corporate-level strategy Different levels and types of diversification Three primary reasons firms diversify Value creation: related diversification strategy Value creation: unrelated diversification strategy Incentives and resources encouraging diversification Management motives for overdiversification Introduction Business-level Strategy An integrated and coordinated set of commitments and actions the firm uses to gain competitive advantage by exploiting core competencies in specific product markets Corporate-level Strategy Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets Expected to help firm earn above-average returns Value ultimately determined by degree to which “the businesses in the portfolio are worth more under the management of the company then they would be under any other ownership” Introduction Corporate-level strategy concerns: The scope of the markets and industries the firm competes in How the firm manages their portfolio of businesses Mode of entry into new businesses Internal development, acquisitions/merger, joint venture/strategic alliance Level and type of diversification Capturing synergies between business units Allocating corporate resources Product diversification is the primary form of corporate-level strategy Diversification is often looked at as a growth strategy Introduction Diversified firms vary according to level and type of diversification (Figure ) Level – # of different industries a firms competes in Type – degree of relatedness between business units Corporate-level strategy is also concerned with: Capturing economies of scope or synergies between business units (Related) Capturing financial synergies (Unrelated) Levels and Types of Diversification Reasons for Diversification (Table ) .

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