Chapter 8 - Diversification: Strategies for managing a group of businesses. After completing this unit, you should be able to: Understand when and how business diversification can enhance shareholder value, gain an understanding of how related diversification strategies can produce cross-business strategic fits capable of delivering competitive advantage, become aware of the merits and risks of corporate strategies keyed to unrelated diversification,. | Chapter 8: Diversification: Strategies for Managing a Group of Businesses Screen graphics created by: Jana F. Kuzmicki, . Troy University Chapter Learning Objectives Understand when and how business diversification can enhance shareholder value. Gain an understanding of how related diversification strategies can produce cross-business strategic fits capable of delivering competitive advantage. Become aware of the merits and risks of corporate strategies keyed to unrelated diversification. Gain command of the analytical tools for evaluating a company’s diversification strategy. Become familiar with a company’s five main corporate strategy options after it has diversified. Chapter Roadmap When to Diversify Building Shareholder Value: The Ultimate Justification for Diversifying Strategies for Entering New Businesses Choosing the Diversification Path: Related versus Unrelated Businesses The Case for Diversifying into Related Businesses The Case for Diversifying into Unrelated Businesses Combination Related-Unrelated Diversification Strategies Evaluating the Strategy of a Diversified Company Diversification and Corporate Strategy A company is diversified when it is in two or more lines of business that operate in diverse market environments Strategy-making in a diversified company is a bigger picture exercise than crafting a strategy for a single line-of-business A diversified company needs a multi-industry, multi-business strategy A strategic action plan must be developed for several different businesses competing in diverse industry environments It is faced with diminishing growth prospects in present business It has opportunities to expand into industries whose technologies and products complement its present business It can leverage existing competencies and capabilities by expanding into businesses where these resource strengths are key success factors It can reduce costs by diversifying into closely related businesses It has a powerful brand name . | Chapter 8: Diversification: Strategies for Managing a Group of Businesses Screen graphics created by: Jana F. Kuzmicki, . Troy University Chapter Learning Objectives Understand when and how business diversification can enhance shareholder value. Gain an understanding of how related diversification strategies can produce cross-business strategic fits capable of delivering competitive advantage. Become aware of the merits and risks of corporate strategies keyed to unrelated diversification. Gain command of the analytical tools for evaluating a company’s diversification strategy. Become familiar with a company’s five main corporate strategy options after it has diversified. Chapter Roadmap When to Diversify Building Shareholder Value: The Ultimate Justification for Diversifying Strategies for Entering New Businesses Choosing the Diversification Path: Related versus Unrelated Businesses The Case for Diversifying into Related Businesses The Case for Diversifying into Unrelated
