SlideShare a Scribd company logo
1 of 27
CHAPTER 8 Strategic Analysis and Choice in the Multibusiness Company: Rationalizing Diversification and Building Shareholder Value
Chapter Topics ,[object Object],[object Object],[object Object]
The Portfolio Approach BCG Growth-Share Matrix Industry Attractiveness-Business Strength Matrix Life Cycle-Competitive Strength Matrix BCG’s Strategic Environments Matrix
Ex. 8-1: The BCG Growth-Share Matrix Star Problem Child Cash Cow Dog Cash Generation (Market Share) High Low High Low Cash Use (Growth Rate) Description of Dimensions Market share: sales relative to those of other competitors in the market (dividing point is usually selected to have only the two-three largest competitors in any market fall into the high market share region) Description of Dimensions Growth Rate: Industry growth rate in constant dollars (diving point is usually the GNP’s growth rate)
Ex. 8-3: Factors Considered in Constructing an Industry Attractiveness-Business Strength Matrix (Industry Attractiveness) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Threat of Substitutes/New Entrants Bargaining Power of Suppliers/Customers Nature of Competitive Rivalry
Ex. 8-3  (contd.) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sociopolitical Considerations Financial Norms Economic Factors
Ex. 8-3  (contd.) (Business Strength) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Response Time Level of Differentiation Cost Position
Ex. 8-3  (contd.) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Public Approval Human Assets Financial Strength
Ex. 8-4: The Industry Attractiveness-Business Strength Matrix High Medium Low Industry Attractiveness High Low Business Strength Medium Invest Selective Growth Grow or Let Go Harvest Divest Grow or Let Go Harvest Selective Growth Grow or Let Go Description of Dimensions Industry Attractiveness : Subjective assessment based on broadest possible range of external opportunities and threats beyond the strict control of management Business Strength : Subjective assessment of how strong a competitive advantage is created by a broad range of the firm’s internal strengths and weaknesses
Advantages of the Industry Attractiveness-Business Strength Matrix Over the BCG Matrix ,[object Object],[object Object],[object Object]
Ex. 8-5: The Market Life Cycle-Competitive Strength Matrix Caution: Invest Selectively Push: Invest Aggresively Danger: Harvest Stage of Market Life Cycle Introduction Growth Maturity Decline High Low Competitive Strength Description of Dimensions Stage of Market Life Cycle : See p. 146 Competitive Strength : Overall subjective rating, based on a wide range of factors regarding the likelihood of gaining and maintaining a competitive advantage
Ex. 8-6: BCG’s Strategic Environments Matrix Fragmented apparel, house building, jewelry retailing, sawmills Specialization pharmaceuticals, luxury cars, chocolate confectionery Stalemate basic chemicals, volume-grade paper, ship owning, wholesale banking Volume jet engines, supermarkets, motorcycles, standard microprocessors Many Few Small Big Size of Advantage Sources of Advantage
Contributions of Portfolio Approaches ,[object Object],[object Object],[object Object],[object Object]
Limitations of Portfolio Approaches ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Ex. 8-7: Value Building in Multibusiness Companies (Market-Related Opportunities) ,[object Object],[object Object],[object Object],[object Object],Lower selling costs Better market coverage Stronger technical advice to buyers Enhanced convenience for buyers Improved access to buyers Shared sales force activities or shared sales office, or both Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-7  (contd.) ,[object Object],[object Object],Lower costs Greater clout in purchasing ads Shared advertising and promotional activities ,[object Object],Stronger brand image and company reputation Increased buyer confidence in the brand Shared brand name ,[object Object],[object Object],Low servicing costs Better utilization of service personnel Faster servicing of customer calls Shared after-sales service and repair work Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-7  (contd.) ,[object Object],Lower order processing costs One-stop shopping for buyer enhances service and, thus, differentiation Shared order processing ,[object Object],[object Object],Lower distribution costs Enhanced bargaining power with distributors and retailers to gain shelf space, shelf positioning, stronger push and more dealer attention, and better profit margins Common distribution channels Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-7  (contd.) (Operating Opportunities) ,[object Object],[object Object],Lower freight and handling costs Better delivery reliability More frequent deliveries, such that inventory costs are reduced Shared inbound or outbound shipping and materials handling ,[object Object],[object Object],Lower input costs Improved input quality Improved service from suppliers Joint procurements of purchased inputs Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-7  (contd.) ,[object Object],[object Object],Lower manufacturing/assembly costs Better capacity utilization, because peak demand for one product correlates with valley demand for other Bigger scale of operation improves access to better technology and results in better quality Shared manufacturing and assembly facilities Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-7  (contd.) ,[object Object],Lower administrative and operating overhead costs Shared administrative support activities ,[object Object],Lower product or process design costs, or both, because of shorter design times and transfers of knowledge from area to area.  More innovative ability, owing to scale of effort and attraction of better R&D personnel Shared product and process technologies or technology development or both Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-7  (contd.) (Management Opportunities) ,[object Object],[object Object],Efficient transfer of a distinctive competence – can create cost savings or enhance differentiation. More effective management as concerns strategy formulation, strategy implementation, and understanding of key success factors Shared management know-how, operating skills, and proprietary information Impediments to Achieving Enhanced Value Potential Competitive Advantage Opportunities to Build Value or Sharing
Ex. 8-9: Six Critical Questions for Diversification Success ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Places to Look for Parenting Opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The Patching Perspective ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Ex. 8-10: Three Approaches to Strategy Key processes and unique simple rules Unique, valuable, inimitable resources Unique, valuable position with tightly integrated activity system Source of advantage How should we proceed? What should we be? Where should we be? Strategic question Jump into the confusion Keep moving Seize opportunities Finish strong Establish a vision Build resources Leverage across markets Identify an attractive market  Locate a defensible position Fortify and defend Strategic logic Simple Rules Resources Position
Ex. 8-10  (contd.) Growth Long-term dominance Profitability Performance goal Managers will be too tentative in executing on promising opportunities Company will be too slow to build new resources as conditions change It will be difficult to alter position as conditions change Risk Unpredictable Sustained Sustained Duration of advantage Rapidly changing, ambiguous markets Moderately changing, well-structured markets Slowly changing, well-structured markets Works best in
Ex. 8-11: Simple Rules, Summarized (Adapted) They help managers decide when to pull out of yesterday’s opportunities. Exit rules They synchronize managers with the pace of emerging opportunities and other parts of the company. Timing rules They help managers rank the accepted opportunities. Priority rules They focus managers on which opportunities can be pursued and which are outside the pale. Boundary rules They spell out key features of how a process is executed – “What makes our process unique?” How-to rules Purpose Type

More Related Content

What's hot

Human Resource Management ( competitive advantage)
Human Resource Management ( competitive advantage)Human Resource Management ( competitive advantage)
Human Resource Management ( competitive advantage)fathima habeeb
 
STRATEGIC MANAGEMENT
STRATEGIC  MANAGEMENTSTRATEGIC  MANAGEMENT
STRATEGIC MANAGEMENTmariamabdulla
 
Ch05 - Organisation theory design and change gareth jones
Ch05 - Organisation theory design and change gareth jonesCh05 - Organisation theory design and change gareth jones
Ch05 - Organisation theory design and change gareth jonesAnkit Kesri
 
Organizational behavior chapter 8 team
Organizational behavior chapter 8 teamOrganizational behavior chapter 8 team
Organizational behavior chapter 8 teamsurajsvh
 
Strategic Change Interventions
Strategic Change InterventionsStrategic Change Interventions
Strategic Change InterventionsFairus Rusdi
 
Ch01 - Organisation theory design and change gareth jones
Ch01 - Organisation theory design and change gareth jonesCh01 - Organisation theory design and change gareth jones
Ch01 - Organisation theory design and change gareth jonesAnkit Kesri
 
Industrial relations and technological change
Industrial relations and technological changeIndustrial relations and technological change
Industrial relations and technological changeGoogle Blogger
 
Porter’s generic competitive strategies
Porter’s generic competitive strategiesPorter’s generic competitive strategies
Porter’s generic competitive strategiesChetna Setia
 
Organisational Effectiveness Theroies
Organisational Effectiveness TheroiesOrganisational Effectiveness Theroies
Organisational Effectiveness TheroiesParag Chaubey
 
Ch04 - Organisation theory design and change gareth jones
Ch04 - Organisation theory design and change gareth jonesCh04 - Organisation theory design and change gareth jones
Ch04 - Organisation theory design and change gareth jonesAnkit Kesri
 
Strategic hrm approaches
Strategic hrm approachesStrategic hrm approaches
Strategic hrm approachesMeera Cherian
 

What's hot (20)

Capital structure
Capital structure Capital structure
Capital structure
 
Strategic Leveraging
Strategic LeveragingStrategic Leveraging
Strategic Leveraging
 
Human Resource Management ( competitive advantage)
Human Resource Management ( competitive advantage)Human Resource Management ( competitive advantage)
Human Resource Management ( competitive advantage)
 
SWOT Analysis in Strategic Management
SWOT Analysis in Strategic ManagementSWOT Analysis in Strategic Management
SWOT Analysis in Strategic Management
 
STRATEGIC MANAGEMENT
STRATEGIC  MANAGEMENTSTRATEGIC  MANAGEMENT
STRATEGIC MANAGEMENT
 
Lecture 1 & 2 Strategic Hrm 2006
Lecture 1 & 2   Strategic Hrm 2006Lecture 1 & 2   Strategic Hrm 2006
Lecture 1 & 2 Strategic Hrm 2006
 
Chap003
Chap003Chap003
Chap003
 
Ch05 - Organisation theory design and change gareth jones
Ch05 - Organisation theory design and change gareth jonesCh05 - Organisation theory design and change gareth jones
Ch05 - Organisation theory design and change gareth jones
 
Ibm unit - v
Ibm   unit - vIbm   unit - v
Ibm unit - v
 
Organizational behavior chapter 8 team
Organizational behavior chapter 8 teamOrganizational behavior chapter 8 team
Organizational behavior chapter 8 team
 
Strategic Change Interventions
Strategic Change InterventionsStrategic Change Interventions
Strategic Change Interventions
 
Business Strategy
Business StrategyBusiness Strategy
Business Strategy
 
Ch01 - Organisation theory design and change gareth jones
Ch01 - Organisation theory design and change gareth jonesCh01 - Organisation theory design and change gareth jones
Ch01 - Organisation theory design and change gareth jones
 
Industrial relations and technological change
Industrial relations and technological changeIndustrial relations and technological change
Industrial relations and technological change
 
Porter’s generic competitive strategies
Porter’s generic competitive strategiesPorter’s generic competitive strategies
Porter’s generic competitive strategies
 
Organisational Effectiveness Theroies
Organisational Effectiveness TheroiesOrganisational Effectiveness Theroies
Organisational Effectiveness Theroies
 
Ch04 - Organisation theory design and change gareth jones
Ch04 - Organisation theory design and change gareth jonesCh04 - Organisation theory design and change gareth jones
Ch04 - Organisation theory design and change gareth jones
 
Executive compensation
Executive compensationExecutive compensation
Executive compensation
 
Business process re engineering
Business process re engineeringBusiness process re engineering
Business process re engineering
 
Strategic hrm approaches
Strategic hrm approachesStrategic hrm approaches
Strategic hrm approaches
 

Viewers also liked

Viewers also liked (20)

Chap011
Chap011Chap011
Chap011
 
Chap005
Chap005Chap005
Chap005
 
Chap006
Chap006Chap006
Chap006
 
Chap002
Chap002Chap002
Chap002
 
Chap004
Chap004Chap004
Chap004
 
Chap010
Chap010Chap010
Chap010
 
Chap001
Chap001Chap001
Chap001
 
Job Analysis
Job AnalysisJob Analysis
Job Analysis
 
CH 7 Pearce Robinson McGrawHill
CH 7 Pearce Robinson McGrawHill CH 7 Pearce Robinson McGrawHill
CH 7 Pearce Robinson McGrawHill
 
Syllabus
SyllabusSyllabus
Syllabus
 
E commerce
E commerceE commerce
E commerce
 
Critical incident method_hrm_appraisal
Critical incident method_hrm_appraisalCritical incident method_hrm_appraisal
Critical incident method_hrm_appraisal
 
Critical incident method of performance appraisal
Critical incident method of performance appraisalCritical incident method of performance appraisal
Critical incident method of performance appraisal
 
Tqm chapter 6
Tqm chapter 6Tqm chapter 6
Tqm chapter 6
 
Principles of TQM
 Principles of TQM Principles of TQM
Principles of TQM
 
Chapter 15 Leadership
Chapter 15 LeadershipChapter 15 Leadership
Chapter 15 Leadership
 
Employee Involvement
Employee InvolvementEmployee Involvement
Employee Involvement
 
Core Competencies
Core CompetenciesCore Competencies
Core Competencies
 
Core competence
Core competenceCore competence
Core competence
 
Employee involvement
Employee involvementEmployee involvement
Employee involvement
 

Similar to Chap008

Strategic management
Strategic managementStrategic management
Strategic managementvidhi dua
 
Chap008 fitting strategy to company and industry
Chap008  fitting strategy to company and industryChap008  fitting strategy to company and industry
Chap008 fitting strategy to company and industryAjit Kumar
 
Technology and Traditional Sources of Competitive Advantage
Technology and Traditional Sources of Competitive AdvantageTechnology and Traditional Sources of Competitive Advantage
Technology and Traditional Sources of Competitive AdvantageTonjeB
 
Ch02a
Ch02aCh02a
Ch02aFNian
 
Strategy to fit specific industry and company situations
Strategy  to  fit  specific  industry  and  company  situationsStrategy  to  fit  specific  industry  and  company  situations
Strategy to fit specific industry and company situationsMD SALMAN ANJUM
 
competitive advantage.ppt
competitive advantage.pptcompetitive advantage.ppt
competitive advantage.pptsheryl90
 
competitive advantage (1).ppt
competitive advantage (1).pptcompetitive advantage (1).ppt
competitive advantage (1).pptsheryl90
 
CIT 3122 Strategic Info Systems Lecture 2 - 2021.ppt
CIT 3122 Strategic Info Systems Lecture 2 - 2021.pptCIT 3122 Strategic Info Systems Lecture 2 - 2021.ppt
CIT 3122 Strategic Info Systems Lecture 2 - 2021.pptanthonywanjohi5
 
Incumbency Advantages
Incumbency AdvantagesIncumbency Advantages
Incumbency Advantagessmehro
 
Supplementing the chosen competitive strategy chapter 6
Supplementing  the  chosen  competitive  strategy chapter 6Supplementing  the  chosen  competitive  strategy chapter 6
Supplementing the chosen competitive strategy chapter 6DurreNao Noman
 
Chap009 managing diversifcation and group
Chap009  managing diversifcation and groupChap009  managing diversifcation and group
Chap009 managing diversifcation and groupAjit Kumar
 
Topic2 Str Analysis
Topic2 Str AnalysisTopic2 Str Analysis
Topic2 Str Analysisguest8fdbdd
 
1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter
1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter
1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The ExterEttaBenton28
 

Similar to Chap008 (20)

Chapter 8
Chapter 8Chapter 8
Chapter 8
 
strm08.ppt
strm08.pptstrm08.ppt
strm08.ppt
 
Strategic management
Strategic managementStrategic management
Strategic management
 
Chap008 fitting strategy to company and industry
Chap008  fitting strategy to company and industryChap008  fitting strategy to company and industry
Chap008 fitting strategy to company and industry
 
Technology and Traditional Sources of Competitive Advantage
Technology and Traditional Sources of Competitive AdvantageTechnology and Traditional Sources of Competitive Advantage
Technology and Traditional Sources of Competitive Advantage
 
Chap 06
Chap 06Chap 06
Chap 06
 
Ch02a
Ch02aCh02a
Ch02a
 
Strategy to fit specific industry and company situations
Strategy  to  fit  specific  industry  and  company  situationsStrategy  to  fit  specific  industry  and  company  situations
Strategy to fit specific industry and company situations
 
chap3.ppt
chap3.pptchap3.ppt
chap3.ppt
 
competitive advantage.ppt
competitive advantage.pptcompetitive advantage.ppt
competitive advantage.ppt
 
competitive advantage (1).ppt
competitive advantage (1).pptcompetitive advantage (1).ppt
competitive advantage (1).ppt
 
CIT 3122 Strategic Info Systems Lecture 2 - 2021.ppt
CIT 3122 Strategic Info Systems Lecture 2 - 2021.pptCIT 3122 Strategic Info Systems Lecture 2 - 2021.ppt
CIT 3122 Strategic Info Systems Lecture 2 - 2021.ppt
 
Incumbency Advantages
Incumbency AdvantagesIncumbency Advantages
Incumbency Advantages
 
Supplementing the chosen competitive strategy chapter 6
Supplementing  the  chosen  competitive  strategy chapter 6Supplementing  the  chosen  competitive  strategy chapter 6
Supplementing the chosen competitive strategy chapter 6
 
Strategy formulation
Strategy formulationStrategy formulation
Strategy formulation
 
Chap009 managing diversifcation and group
Chap009  managing diversifcation and groupChap009  managing diversifcation and group
Chap009 managing diversifcation and group
 
Topic2 Str Analysis
Topic2 Str AnalysisTopic2 Str Analysis
Topic2 Str Analysis
 
Location plgg
Location plggLocation plgg
Location plgg
 
Marketing
MarketingMarketing
Marketing
 
1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter
1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter
1CHAPTER4BUSINESS-LEVEL STRATEGYChapter 2The Exter
 

More from Avinash Kumar (19)

Kotlers Soft Copy
Kotlers Soft CopyKotlers Soft Copy
Kotlers Soft Copy
 
SHRM
SHRMSHRM
SHRM
 
Selection
SelectionSelection
Selection
 
Recruitment
RecruitmentRecruitment
Recruitment
 
Hrp
HrpHrp
Hrp
 
Hra
HraHra
Hra
 
Chapter 30
Chapter 30Chapter 30
Chapter 30
 
Chapter 29
Chapter 29Chapter 29
Chapter 29
 
Chapter 27
Chapter 27Chapter 27
Chapter 27
 
Chapter 26
Chapter 26Chapter 26
Chapter 26
 
Chapter 11
Chapter 11Chapter 11
Chapter 11
 
Chapter 25
Chapter 25Chapter 25
Chapter 25
 
Chapter 24
Chapter 24Chapter 24
Chapter 24
 
Chapter 23
Chapter 23Chapter 23
Chapter 23
 
Chapter 22
Chapter 22Chapter 22
Chapter 22
 
Chapter 20
Chapter 20Chapter 20
Chapter 20
 
Chapter 19
Chapter 19Chapter 19
Chapter 19
 
Chapter 17
Chapter 17Chapter 17
Chapter 17
 
Chapter 16
Chapter 16Chapter 16
Chapter 16
 

Recently uploaded

What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...AbhishekSharma823325
 
Unlocking Growth The Power of Outsourcing for CPA Firms
Unlocking Growth The Power of Outsourcing for CPA FirmsUnlocking Growth The Power of Outsourcing for CPA Firms
Unlocking Growth The Power of Outsourcing for CPA FirmsYourLegal Accounting
 
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...YourLegal Accounting
 
Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsCaitlinCummins3
 
Space Tech Expo Exhibitor List 2024 - Exhibitors Data
Space Tech Expo Exhibitor List 2024 - Exhibitors DataSpace Tech Expo Exhibitor List 2024 - Exhibitors Data
Space Tech Expo Exhibitor List 2024 - Exhibitors DataExhibitors Data
 
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...Khaled Al Awadi
 
The Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and UncertaintyThe Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and Uncertaintycapivisgroup
 
wagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORIwagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORIIRODORI inc.
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementsirhcs
 
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfThe Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfbelieveminhh
 
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...CIO Look Magazine
 
Should Law Firms Outsource their Bookkeeping
Should Law Firms Outsource their BookkeepingShould Law Firms Outsource their Bookkeeping
Should Law Firms Outsource their BookkeepingYourLegal Accounting
 
Navigating Tax Season with Confidence Streamlines CPA Firms
Navigating Tax Season with Confidence Streamlines CPA FirmsNavigating Tax Season with Confidence Streamlines CPA Firms
Navigating Tax Season with Confidence Streamlines CPA FirmsYourLegal Accounting
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfHolger Mueller
 

Recently uploaded (20)

Obat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di Depok
Obat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di DepokObat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di Depok
Obat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di Depok
 
What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...
 
Obat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di Pasuruan
Obat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di PasuruanObat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di Pasuruan
Obat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di Pasuruan
 
Home Furnishings Ecommerce Platform Short Pitch 2024
Home Furnishings Ecommerce Platform Short Pitch 2024Home Furnishings Ecommerce Platform Short Pitch 2024
Home Furnishings Ecommerce Platform Short Pitch 2024
 
Unlocking Growth The Power of Outsourcing for CPA Firms
Unlocking Growth The Power of Outsourcing for CPA FirmsUnlocking Growth The Power of Outsourcing for CPA Firms
Unlocking Growth The Power of Outsourcing for CPA Firms
 
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
 
Powerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metricsPowerpoint showing results from tik tok metrics
Powerpoint showing results from tik tok metrics
 
Space Tech Expo Exhibitor List 2024 - Exhibitors Data
Space Tech Expo Exhibitor List 2024 - Exhibitors DataSpace Tech Expo Exhibitor List 2024 - Exhibitors Data
Space Tech Expo Exhibitor List 2024 - Exhibitors Data
 
Contact +971581248768 for 100% original and safe abortion pills available for...
Contact +971581248768 for 100% original and safe abortion pills available for...Contact +971581248768 for 100% original and safe abortion pills available for...
Contact +971581248768 for 100% original and safe abortion pills available for...
 
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...NewBase   17 May  2024  Energy News issue - 1725 by Khaled Al Awadi_compresse...
NewBase 17 May 2024 Energy News issue - 1725 by Khaled Al Awadi_compresse...
 
The Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and UncertaintyThe Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and Uncertainty
 
wagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORIwagamamaLab presentation @MIT 20240509 IRODORI
wagamamaLab presentation @MIT 20240509 IRODORI
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statements
 
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdfThe Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
The Vietnam Believer Newsletter_May 13th, 2024_ENVol. 007.pdf
 
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
Most Visionary Leaders in Cloud Revolution, Shaping Tech’s Next Era - 2024 (2...
 
Should Law Firms Outsource their Bookkeeping
Should Law Firms Outsource their BookkeepingShould Law Firms Outsource their Bookkeeping
Should Law Firms Outsource their Bookkeeping
 
Navigating Tax Season with Confidence Streamlines CPA Firms
Navigating Tax Season with Confidence Streamlines CPA FirmsNavigating Tax Season with Confidence Streamlines CPA Firms
Navigating Tax Season with Confidence Streamlines CPA Firms
 
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdfProgress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
Progress Report - UKG Analyst Summit 2024 - A lot to do - Good Progress1-1.pdf
 
Obat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di Malang
Obat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di MalangObat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di Malang
Obat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di Malang
 
WAM Corporate Presentation May 2024_w.pdf
WAM Corporate Presentation May 2024_w.pdfWAM Corporate Presentation May 2024_w.pdf
WAM Corporate Presentation May 2024_w.pdf
 

Chap008

  • 1. CHAPTER 8 Strategic Analysis and Choice in the Multibusiness Company: Rationalizing Diversification and Building Shareholder Value
  • 2.
  • 3. The Portfolio Approach BCG Growth-Share Matrix Industry Attractiveness-Business Strength Matrix Life Cycle-Competitive Strength Matrix BCG’s Strategic Environments Matrix
  • 4. Ex. 8-1: The BCG Growth-Share Matrix Star Problem Child Cash Cow Dog Cash Generation (Market Share) High Low High Low Cash Use (Growth Rate) Description of Dimensions Market share: sales relative to those of other competitors in the market (dividing point is usually selected to have only the two-three largest competitors in any market fall into the high market share region) Description of Dimensions Growth Rate: Industry growth rate in constant dollars (diving point is usually the GNP’s growth rate)
  • 5.
  • 6.
  • 7.
  • 8.
  • 9. Ex. 8-4: The Industry Attractiveness-Business Strength Matrix High Medium Low Industry Attractiveness High Low Business Strength Medium Invest Selective Growth Grow or Let Go Harvest Divest Grow or Let Go Harvest Selective Growth Grow or Let Go Description of Dimensions Industry Attractiveness : Subjective assessment based on broadest possible range of external opportunities and threats beyond the strict control of management Business Strength : Subjective assessment of how strong a competitive advantage is created by a broad range of the firm’s internal strengths and weaknesses
  • 10.
  • 11. Ex. 8-5: The Market Life Cycle-Competitive Strength Matrix Caution: Invest Selectively Push: Invest Aggresively Danger: Harvest Stage of Market Life Cycle Introduction Growth Maturity Decline High Low Competitive Strength Description of Dimensions Stage of Market Life Cycle : See p. 146 Competitive Strength : Overall subjective rating, based on a wide range of factors regarding the likelihood of gaining and maintaining a competitive advantage
  • 12. Ex. 8-6: BCG’s Strategic Environments Matrix Fragmented apparel, house building, jewelry retailing, sawmills Specialization pharmaceuticals, luxury cars, chocolate confectionery Stalemate basic chemicals, volume-grade paper, ship owning, wholesale banking Volume jet engines, supermarkets, motorcycles, standard microprocessors Many Few Small Big Size of Advantage Sources of Advantage
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20.
  • 21.
  • 22.
  • 23.
  • 24.
  • 25. Ex. 8-10: Three Approaches to Strategy Key processes and unique simple rules Unique, valuable, inimitable resources Unique, valuable position with tightly integrated activity system Source of advantage How should we proceed? What should we be? Where should we be? Strategic question Jump into the confusion Keep moving Seize opportunities Finish strong Establish a vision Build resources Leverage across markets Identify an attractive market Locate a defensible position Fortify and defend Strategic logic Simple Rules Resources Position
  • 26. Ex. 8-10 (contd.) Growth Long-term dominance Profitability Performance goal Managers will be too tentative in executing on promising opportunities Company will be too slow to build new resources as conditions change It will be difficult to alter position as conditions change Risk Unpredictable Sustained Sustained Duration of advantage Rapidly changing, ambiguous markets Moderately changing, well-structured markets Slowly changing, well-structured markets Works best in
  • 27. Ex. 8-11: Simple Rules, Summarized (Adapted) They help managers decide when to pull out of yesterday’s opportunities. Exit rules They synchronize managers with the pace of emerging opportunities and other parts of the company. Timing rules They help managers rank the accepted opportunities. Priority rules They focus managers on which opportunities can be pursued and which are outside the pale. Boundary rules They spell out key features of how a process is executed – “What makes our process unique?” How-to rules Purpose Type