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    6: Corporate-Level Strategy 152: Strategic Focus

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    Kavya Gopakumar
    This document discusses different levels and types of corporate diversification strategies including related, unrelated, and value-creating, neutral, or reducing diversification. It explains reasons companies diversify such as pursuing related business opportunities to leverage core competencies, increasing market power, or accessing resources. The document also reviews acquisition strategies for horizontal and vertical integration to expand market power, overcome barriers, speed new products, and reshape competitive scope.

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    6: Corporate-Level Strategy 152: Strategic Focus

    Uploaded by

    Kavya Gopakumar
    40 views1 page
    This document discusses different levels and types of corporate diversification strategies including related, unrelated, and value-creating, neutral, or reducing diversification. It explains reasons companies diversify such as pursuing related business opportunities to leverage core competencies, increasing market power, or accessing resources. The document also reviews acquisition strategies for horizontal and vertical integration to expand market power, overcome barriers, speed new products, and reshape competitive scope.

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    This document discusses different levels and types of corporate diversification strategies including related, unrelated, and value-creating, neutral, or reducing diversification. It explains reasons companies diversify such as pursuing related business opportunities to leverage core competencies, increasing market power, or accessing resources. The document also reviews acquisition strategies for horizontal and vertical integration to expand market power, overcome barriers, speed new products, and reshape competitive scope.

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    © All Rights Reserved
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    40 views1 page

    6: Corporate-Level Strategy 152: Strategic Focus

    Uploaded by

    Kavya Gopakumar
    This document discusses different levels and types of corporate diversification strategies including related, unrelated, and value-creating, neutral, or reducing diversification. It explains reasons companies diversify such as pursuing related business opportunities to leverage core competencies, increasing market power, or accessing resources. The document also reviews acquisition strategies for horizontal and vertical integration to expand market power, overcome barriers, speed new products, and reshape competitive scope.

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    of 1

    6: Corporate-Level Strategy 152

    Opening Case: Procter and Gamble’s Diversification Strategy 153


    Levels of Diversification 155
    Low Levels of Diversification 155
    Moderate and High Levels of Diversification 156
    Reasons for Diversification 157
    Value-Creating Diversification: Related Constrained and Related
    Linked Diversification 158
    Operational Relatedness: Sharing Activities 159
    Corporate Relatedness: Transferring of Core Competencies 160
    Market Power 161
    Simultaneous Operational Relatedness and Corporate Relatedness 163
    Unrelated Diversification 163
    Strategic Focus: Operational and Corporate Relatedness: Smith & Wesson
    and Luxottica 164
    Efficient Internal Capital Market Allocation 165
    Restructuring of Assets 166
    Value-Neutral Diversification: Incentives and Resources 166
    Strategic Focus: Revival of the Unrelated Strategy (Conglomerate): Small Firms Acquire
    Castoffs from Large Firms and Seek to Improve Their Value 167
    Incentives to Diversify 168
    Resources and Diversification 171
    Value-Reducing Diversification: Managerial Motives to Diversify 172
    Summary 174 • Review Questions 174 • Experiential Exercises 175 • Notes 175
    7: Acquisition and Restructuring Strategies 180
    Opening Case: The Increased Trend Toward Cross-Border
    Acquisitions 181
    The Popularity of Merger and Acquisition Strategies 183
    Mergers, Acquisitions, and Takeovers: What Are the Differences? 184
    Reasons for Acquisitions 184
    Increased Market Power 184
    Strategic Focus: Oracle Makes a Series of Horizontal Acquisitions While
    CVS Makes a Vertical Acquisition 185
    Overcoming Entry Barriers 187
    Cost of New Product Development and Increased Speed to Market 188
    Lower Risk Compared to Developing New Products 189
    Increased Diversification 189
    Reshaping the Firm’s Competitive Scope 190

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