Chapter 7 Developing Corporate Strategy. OBJECTIVES . 1. Define corporate strategy. Understand the roles of economies of scope and revenue-enhancement synergy in corporate strategy. 2. 3. Explain the different forms of diversification. 4.
Define corporate strategy
Understand the roles of economies of scope and revenue-enhancement synergy in corporate strategy
Explain the different forms of diversification
Understand when it makes sense for a firm to own a particular business
Explain the corporate strategy implications of the stable and dynamic perspectives
Explain the profit pool and portfolio perspectives of corporate strategic expansion
Types of businesses
Heavy reliance on acquisition
Many seemingly un-related businesses
Many businesses clustered in a few related industries
Product extensions/new product lines
Few related product lines
Also, how do we create synergiesbetween our busi-nesses?
Which vehicles should it use to enter/exita business?
What underlining economic logic makes it sensible to compete in multiple businesses?
3THREE CORPORATE STRATEGY DECISIONS THAT ARISE WHEN MAKING ENTRY/EXIT DECISIONS
The Answers can change
What businesses should
we be in?
PC’s and Mainframes
Fed Ex acquired Kinko’s
Drop off and pick up points for packages
Valuation of profit
Fit among parent-subsidiary resources
Fit of parent-subsidiary dominant logic
Coke andPepsi expandedinto water
Pulte HomesInc. created Pulte Mortgage LLC)