The document provides an overview of corporate strategy, including definitions, history, and schools of thought. It discusses key concepts such as resources and capabilities, portfolio management, value-oriented management, and aspiration-based management. Specifically, it summarizes the resources and capabilities view, which focuses on identifying a company's core competencies and leveraging them across business units as the basis for long-term competitive advantage.

1. Primer on Corporate Strategy –
An Overview of External Thinking

2. 2
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

3. 3
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

4. 4
WHAT IS CORPORATE STRATEGY? – QUOTES FROM ACADEMICS
"Corporate strategy is concerned with the overall purpose and scope of
the organization to meet the expectations of owners or major
shareholders and add value to the different parts of the enterprise"
J. Johnson/K. Scholes, 1999
"By the fashionable phrase, "corporate strategy" (…) I mean the pattern
of company purposes and goals—and the major policies for achieving
these goals—that defines the business or businesses the company is to
be involved with and the kind of company it is to be"
Kenneth R. Andrews, 1980
"Corporate strategy concerns two different questions: What business the
corporation should be in and how the corporate office should manage the
array of business units. Corporate strategy is what makes the corporate
whole add up more than the sum of its business unit parts"
Michael E. Porter, 1987

5. 5
THE STRATEGY-MAKING PYRAMID
Source: Adapted from Thomson, Strickland and Thompson, 1999
Corporate strategy
• In which businesses should the
corporation be in?
• How can the corporate headquarter
add value to the individual
businesses?
Business unit strategy
• How to create competitive
advantage in each of the
businesses?
Tactics
• How to manage frontline
organisational units within a
business (i.e. plants, sales
districts)?
Two-way influence
Tactics
Business
unit
strategies
Corporate
strategy

6. 6
TRADITIONAL CHARACTERISTICS OF CORPORATE STRATEGY
• Corporation is diversified
• Decisions about scope and structure of the corporate portfolio
are necessary
• Acquisitions and divestments are necessary
Multi-business
• The corporate whole must add up to more than the sum of its
parts
• Corporate strategy defines functions and duties of the
corporate center to create value
Value-creation
• The strategic creation, allocation and development of
resources and competences are an essential task of corporate
strategy
Resources and
competences
• Corporate strategy has to give the corporation a mission
• To raise shareholder value is a constraint, not a missionSense
• The development and definition of the corporate strategy is
the responsibility of the senior management
Senior
management
Source: XYZ analysis

7. 7
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

8. 8
EVOLUTION OF CORPORATE STRATEGY
Source: Goold, Campbell and Alexander, 1994; Goold and Luchs, 1993
Issue to be
addressed
Principal
theories
Impact on
corporate
strategy
development
• Overload
at the
corporate
center
• Decen-
tralization
• Divisional-
ization
• Growth
• Synergy
• Diversifi-
cation
• Resource
allocation
• Portfolio
planning
• Balanced
portfolios
• Value gaps
• Poor per-
formance of
diversifica-
tion
• Value-based
planning
• Restructuring/
refocusing
• Defining the core
business
• Dominant logic
• Management styles
• Core competencies
• Shared resources
• Parenting
advantage
• Manageable
portfolios
• Maximizing value
creation
1950s 1960s 1970s 1980s 1990s
Basis of
corporate
value added
• General management
skills
• Strategy
concepts
• Portfolio
planning
techniques
• Value-based
planning
concepts
• Core competencies

9. 9
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

10. 10
SCHOOLS OF THOUGHT AND RESEARCH APPROACHES
Aspiration-based
management
• Purpose of the
company as
starting point
and bench-
mark of
corporate
strategy
Resources and
capabilities
• Resources and
capabilities are
important instead
of SBUs
• Identification and
exploitation of
resources and
capabilities to
achieving
competitive
advantage
Portfolio
management
• Management
of the
corporate
portfolio
• Identification/
selection of
businesses to
invest in/divest
Value-oriented
management
Research
approaches
• Portfolio
planning
• Portfolio
concepts
• Diversification
• Core competen-
cies
• Strategic
capabilities
• Resource-based
view
• Vision, mission
and objectives
• Value-based
management
• Parenting
advantage
• Combination
of strategic
thinking and
the modern
theory of
finance
• Increasing
shareholder
value
Schools of
thought
Source: XYZ analysis
Focus

11. 11
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

12. 12
RESOURCES AND CAPABILITIES: SYNOPSIS/SUMMARY
Focus
Contri-
butions
Limi-
tations
• Corporate strategy should
focus on core competencies
instead of on BUs
• Shift in logic of competition
from "outside-in" (external
product market positions) to
"inside-out" (internal
capabilities)
• Resources (assets, skills,
capabilities) and the way
they can be leveraged
across BUs are the focus
of corporate strategy
• Core competencies are the
key organizational skills,
mainly related to production
and technologies
• Core competencies
represent the roots of long-
term competitive advantage
• They represent corporate
resources and need to be
leveraged across BUs
• Competitive success depends
on transforming a company's
key processes into strategic
capabilities, linked by a
support infrastructure
• Capabilities are collective and
cross-functional/cross-SBU
• Diversification works by
replicating strategic
capabilities
• Diversification should be
based on similarities in
resources (not products)
• The nature of the
resources determines the
configuration of the
corporation (in terms of
scope, coordination and
control)
• Definition of core
competencies not very
specific
• Practical implementation
approach of core
competencies missing
• High-level, conceptual
approach with difficulties and
open questions in
implementation
• Difficult to determine
critical resources
Resources and capabilities
Core competencies Strategic capabilities Resource-based view
Main
authors
• Prahalad and Hamel, 1990 • Stalk, Evans and Shulman,
1992
• Wernerfelt, 1984; Collis
and Montgomery, 1998
Source: XYZ analysis

13. 13
CORE COMPETENCIES AND COMPETITIVENESS
• Derives from price/
performance
attributes of current
end products
• Derives from ability to
build–at lower cost
and more speedily
than competitors–
core competencies
Short-term
Long-term
Core competencies are
• The collective learning in the
organization
• About how to coordinate diverse
production skills and integrate multiple
streams of technologies
• About the cross-unit and cross-
functional organization of work
• Corporate resources and may be
reallocated by corporate management
• The engine for new business
development (guidance for
diversification and market entry)
• The focus of competitive strategy at
the corporate level
• Built and developed deliberately
through a process of continuous
improvement and enhancement that
may span a decade or longer
• The roots of competitive advantage
Competi-
tiveness of a
company
Source: Prahalad and Hamel, 1990

14. 14
THREE TESTS TO IDENTIFY CORE COMPETENCIES
Few corporations are likely to
build world leadership in more
than five or six fundamental
competencies
A core competence
Provides potential access to a wide
variety of markets
Should make a significant contribution
to the perceived customer benefits of
the end product
Should be difficult for competitors
to imitate
1
2
3
Source: Prahalad and Hamel, 1990

15. 15
CORE COMPETENCIES AS THE ROOTS OF COMPETITIVE
ADVANTAGE
End products
Competence 1 Competence 2 Competence 3 Competence 4
Core
product 1
Core
product 2
Business
unit 1
Business
unit 2
Business
unit 3
Business
unit 4
1 32 4 65 7 98 10 1211
Level and goal of competition
• Level of competition 1: End
products
• Goal: Build leadership position in
global brand share (with respect to
product markets)
• Level 2: Core products
• Goal: Maximize world manufacturing
share in core products (for wide variety
of internal and external customers;
leads to economies of scale and
scope)
• Level 3: Core competencies
• Goal: Build world leadership in design
and development of a particular class
of product functionality
Analysis of underlying
competitiveness has to look at core
competencies not at end products
Core products are the
physical embodiments
of one or more core
competencies; they
are the components or
subassemblies that
actually contribute to
the value of the end
products
Source: Prahalad and Hamel, 1990

16. 16
TWO CONCEPTS OF THE CORPORATION
SBU Core competence
Basis for
competition
Corporate
structure
Status of the
business unit
Resource
allocation
Value added of
top management
• Competitiveness of today's
products
• Portfolio of businesses related
in product-market terms
• Autonomy is sacrosanct; the
SBU "owns" all resources
other than cash
• Discrete businesses are
the unit of analysis
• Capital is allocated
business by business
• Optimizing corporate returns
through capital allocation trade-
offs among businesses
• Interfirm competition to
build competencies
• Portfolio of competencies,
core products and businesses
• SBU is potential reservoir
of core competencies
• Businesses and competencies
are the unit of analysis
• Top management allocates
capital and talent
• Enunciating strategic architecture
and building competencies to
secure the future
• SBU concept of the
corporation leads to focus on
only one level of the
competitive battle
• It leads to
– Underinvestment:
Underinvestment in
developing core
competencies and
core products and thus in
broader, cross-unit
advantages
– Imprisoned resources:
SBUs are unwilling to lend
their best talent and
carriers of competencies
– Bounded innovation:
Individual SBUs will pursue
only innovation
opportunities that are close
to hand–especially no
hybrid opportunities that
combine several skills and
technologies
Source: Prahalad and Hamel, 1990

17. 17
STRATEGIC ARCHITECTURE AND THE ROAD TO A
COMPETENCE-BASED COMPANY
Definition
Fundamental
questions to ask
• Strategic architecture is a road map
of the future that identifies which
core competencies to build and their
constituent skills and technologies
• It broadly describes the evolving
linkages between customer
functionality requirements, potential
technologies and core competencies
• It provides a logic for product and
market diversification and makes
resource allocation priorities
transparent to the entire organization
• How long could the company
preserve its competitiveness in this
business if it did not control this
particular core competence?
• How central is this core competence
to perceived customer benefits?
• What future opportunities would be
foreclosed if the company were to
lose this particular competence?
Additional adjustments are
necessary to become a
competence-based company
• Resource allocation: Core
competencies are corporate
resources and SBUs should
bid for them in the same way
they bid for capital
• Reward systems: In addition
to (SBU-centered) product-line
results, investment in and
development of competencies
have be rewarded heavily
• Career paths: They have to
cross SBU boundaries and
critical carriers of core
competencies have to be
tracked and guided specifically
Source: Prahalad and Hamel, 1990

18. 18
STRATEGIC CAPABILITIES: FUNDAMENTAL SHIFT IN LOGIC OF
COMPETITION
Source: Stalk, Evans and Shulman, 1992
"Old" logic of competition "New" logic of competition
Nature of com-
petition
• "War of position", chess-like • "War of movement", similar to an
interactive video game
State of economy • Relatively static: World is
characterized by durable products,
stable customer needs, well-
defined national and regional
markets and clearly identified
competitors
• More dynamics: Product life
cycles accelerate, markets
fragment and customer needs
change frequently, globalization
breaks down barriers between
national and regional markets and
competitors multiply
Key to competitive
advantage
• Choose where to compete: The
structure of a company's products
and markets is key
• Choose how to compete: The
dynamics of the organization's
behavior, the development of hard-
to-imitate organizational
capabilities are key
Shift in economy
necessitates shift in logic
of competition

19. 19
FOUR BASIC PRINCIPLES OF CAPABILITIES-BASED COMPETITION
„ Champion of a capabilities-
based strategy is the CEO,
because capabilities need to
cross functions and SBUs
‚ Competitive success depends
on transforming a company's
key processes into strategic
capabilities that provide
superior customer value
ƒ Companies create capabilities by making
strategic investments in a support
infrastructure that links together and
transcends traditional SBUs and functions
Strategic
capabilities
Business
processes
Support infrastructure
… get transformed into ...
CEO
 Business processes, not
products and markets are the
building blocks of corporate
strategy
Source: Stalk, Evans and Shulman, 1992

20. 20
STRATEGIC CAPABILITIES
• The key to transform individual business processes into a strategic
capability is to connect them to real customer needs
• A capability is strategic only when it begins and ends with the customer
• Capabilities-driven companies conceive of their organization as a giant
feedback loop that begins with identifying the needs of the customer and
ends with satisfying them
Development of
strategic
capabilities
• Capabilities-based companies identify their key business processes,
manage them centrally and invest in them heavily, looking for long-term pay
back
• Leveraging capabilities requires many strategic investments across SBUs
and functions far beyond what traditional cost-benefit metrics can justify
Management of
capabilities
• Capabilities-based companies are integrating vertically to ensure that they,
not a supplier or distributor, control the performance of key business
processes
• Even when a company doesn't actually own every link of the capability
chain, it works very hard to tie these parts very closely into its own business
system
Point of view on
vertical integration
• A capability is a set of business processes strategically understood, i.e.,
they represent the primary object of strategy
• Capabilities are collective and cross-functional/cross-SBU: They are a small
part of many people's job, not a large part of a few
Definition
Source: Stalk, Evans and Shulman, 1992

21. 21
BECOMING A CAPABILITIES-BASED COMPETITOR
• Abandon traditional focus
on strategic positioning in
core markets/products
• Conceive business in terms
of strategic capabilities
• Identify capabilities linking
customer needs to
customer satisfaction
• Set aggressive goals
• Build up/strengthen chosen
strategic capabilities by
– Adapting the organization,
roles and responsibilities
– Providing training to
employees
– Providing supporting
systems
• Develop measurement
system linked to strategic
capabilities
• Compensate according to
new measures
Top management needs to be involved
because capabilities are cross-functional and
cross-SBU and becoming a capabilities-based
competitor requires a high amount of change
Shift strategic framework
Organize around strategic
capabilities
Adapt measurement and
reward system
Let CEO/top management lead the transformation
Source: Stalk, Evans and Shulman, 1992

22. 22
NEW CAPABILITIES-BASED GROWTH LOGIC
Strategic advantages built on
capabilities are easier to transfer
geographically than more
traditional competitive
advantages
No growth/
diversificatio
n in
businesses
with new
strategic
business
processes/
capabilities
Previous choice of
capabilities determines path
and ability to grow; the right
choice of them is thus the
essence of strategy
Businesses
Geographic
area
New growth 1
New
growth
2
Strategic
capabilities
Biggest payoff for capabilities-led
growth through entry in new
businesses by
• "Cloning"/duplicating key
business processes
• Creating processes so flexible
and robust that the same set
can serve many different
businesses
Source: Stalk, Evans and Shulman, 1992
Current

23. 23
HOW CAPABILITIES DIFFER FROM CORE COMPETENCIES
Definition Example
Diversification
rationale
• Complementary
dimensions of a
new corporate
strategy paradigm
• Both concepts
emphasize
behavioral aspects
of strategy in
contrast to the
traditional
structural model
Diversification
successful if
built on existing
core
competencies
Combination of
individual tech-
nologies and
production skills
that underly a
company's many
product lines at
specific points in
the value chain
• Sony's competence in
miniaturization
• Canon's competence in optics,
imaging and microprocessor
controls
• Honda's competence in
engines/power trains
Corecompetency
Diversification
successful by
replicating
strategic
capabilities
Business pro-
cesses that
encompass the
value chain
more broadly
and are more
visible to the
customer
• Honda's dealer management:
Training and support of dealer
network with operating
procedures, policies for mer-
chandising, selling, floor
planning, service management
• Honda's product realization:
Continuous and parallel product
planning and testing separated
from execution; product launch
in existing factories
Capability
Source: Stalk, Evans and Shulman, 1992

24. 24
RESOURCE-BASED VIEW: INTRODUCTION AND OVERVIEW
Definition of corporate
strategy/corporate
advantage
View on diversifi-
cation/expansion
of businesses
Corporate value
added
Process of corporate
strategy development
• The way a company creates value through the configuration and
coordination of its multi-business activities
• New businesses should be entered based on similarities in resources
that contribute to competitive advantage in each business, not based
on similarities in products
• The firm's corporate capabilities/resources have to enhance the
competitiveness of every business it owns
• The benefits of corporate membership must be greater than its costs
• Corporate acid test: The company's businesses must not be worth
more to another owner
• The development of corporate strategy starts with a vision of how a
company's resources will differentiate it from competitors across multiple
businesses
• The vision guides corporate strategy in that it shows how a firm, as a
whole, will create value
• The vision has to be followed up by deliberate investments in those
resources over many years
• The organization has to be tailored to make the strategy a reality
• Benchmarking (looking at companies with successful strategies build
around types of resources that are similar to the company's and
contrasting them with companies that are further away on the resource
continuum) can be very helpful
Source: Collis and Montgomery, 1998

25. 25
THE TRIANGLE OF CORPORATE STRATEGY (1/2)
Coordination Control
Competitive advantage
Businesses
Resources
Organization
Vision
• Provides direction
• Discussion of
corporate strategy
begins with vision
• Segments/industries in
which the company
operates
• Assets
• Skills
• Capabilities
• Structure: The way the corporation is divided into units
• Systems: Set of formal policies and routines that
govern organizational behavior (especially
measurement and reward systems)
• Processes: Informal elements of the organization's
activities (e.g., personal relationships)
Source: Collis and Montgomery, 1998

26. 26
THE TRIANGLE OF CORPORATE STRATEGY (2/2)
Great corporate strategies
result from
• Strength in each element
of corporate strategy
– High-quality resources
– Strong market positions of the
businesses in attractive
industries
– Efficient administrative
organization
• Tight fit and integration
of the elements
– Resources that are critical to
the success of the businesses
result in competitive advantage
– An organization configured to
leverage those resources into
the businesses leads to
synergies and coordination
– Fit between measurement and
reward systems and the
businesses produces strategic
control
Coordination Control
Competitive advantage
Businesses
Resources
Organization
Vision
Source: Collis and Montgomery, 1998

27. 27
RESOURCES AND THE CONFIGURATION OF THE CORPORATION:
THE RESOURCE CONTINUUM (1/2)
General SpecializedNature of resources
Wide NarrowScope of businesses
OperatingFinancial Control systems
Small LargeCorporate office size
Transferring SharingCoordination mechanisms
As resources become more specialized,
the value of moving from financial to
operating controls increases
The more general the resources and
the less the need for sharing, the
smaller the corporate office should be
Companies with specialized resources
will compete in a narrower range of
businesses
The more general the resource, the
more likely the company can effectively
deploy it through transfer
Source: Collis and Montgomery, 1998

28. 28
RESOURCES AND THE CONFIGURATION OF THE CORPORATION:
THE RESOURCE CONTINUUM (2/2)
General SpecializedNature of resources
Wide NarrowScope of businesses
OperatingFinancial Control systems
Small LargeCorporate office size
Transferring SharingCoordination mechanisms
As resources become more specialized,
the value of moving from financial to
operating controls increases
The more general the resources and
the less the need for sharing, the
smaller the corporate office should be
Companies with specialized resources
will compete in a narrower range of
businesses
The more general the resource, the
more likely the company can
effectively deploy it through transfer
• A corporation's location on the continuum constrains the set
of businesses it should compete in and limits its choices
about the design of its organization along the other
dimensions below
• Transfer of resources to capture synergies leaves
independence and accountability of BUs intact
• Sharing of resources usually entails intense coordination
and cross-unit committees in order to effectively leverage
the resources and manage the included conflicts and trade-
offs
• Activities that are especially scale sensitive should be
shared
• Activities that are "public goods" (that can be used in
several businesses simultaneously without conflict) should
be transferred
• Financial control looks at a few objective output variables
(most appropriate in mature, stable businesses and discrete
BUs)
• Operating control is concerned with evaluating manager's
decisions and actions
• Resources provide the basis for corporate advantage (they
are the unifying thread) and range along a continuum
Source: Collis and Montgomery, 1998

29. 29
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

30. 30
PORTFOLIO MANAGEMENT: SYNOPSIS/SUMMARY
Focus
Contri-
butions
Limi-
tations
• Identification/selection of
businesses to invest in/
divest
• Activities where corporate can
add value
• Questions and criteria to
consider when thinking
about diversification
• Helpful tools for cash flow
allocation
• Helpful in determining the
positions of the business
units
• Usage of interrelationships
among core businesses
• Four different concepts of
corporate strategy to add value
to the corporate portfolio
– Portfolio management
– Restructuring
– Transferring skills
– Sharing activities
• Forms of diversification
• Structured approach for
diversification decision-
making
• Tendency towards over-
simplification and
trivialization of corporate
strategy formulation
• Implicit assumption of self-
sustainability (in terms of
capital) of businesses
• Based on the assumption of
efficient capital markets
• Assumes that transferring
skills/sharing activities is easily
executable
• Beliefs in significant horizontal
synergies
• Criteria for appropriate
relatedness/scope of
corporation is missing
• Although synergy is
conceptually defined, its
realization is often unclear
Portfolio management
Portfolio planning Portfolio concepts Diversification
Main
authors
• Henderson, 1979; XYZ • Porter, 1987 • Andrews, 1951; Markides,
1997
Source: XYZ analysis

31. 31
PORTFOLIO PLANNING: GROWTH-SHARE-MATRIX
Key sources:
• Balanced portfolio in terms
of cash-flow allocation/
generation
• Predescribed strategy
for each role/segment
Star Question mark
Cash cow Poor dog
Market share
?
High Low
High
Low
Market
growth
Source: Haspeslagh, 1982
Goal:
• Henderson, 1979
Limitations: • Market share as dimen-
sion is only of limited value
(requires a appropriate
market definition)
• Results depend on high
market growth, validity of
the experience curve and
the fact that no
interdependencies
between the SBUs exist
• Ignores resources and
capabilities and inter-
dependencies except for
cash-flow

32. 32
High Medium Low
Industry attractiveness
LowMediumHigh
BusinesspositionPORTFOLIO PLANNING: INDUSTRY ATTRACTIVENESS-
BUSINESS POSITION-MATRIX
Invest
Selective
growth
Up or
out Harvest
Harvest Divest
Up or
out
Selective
growth
Up or
out
Key sources: • XYZ
• General Electric
Goal: • Scoring model for
portfolio planning
Limitations: • Results are highly
sensitive to percep-
tional change and
modification in
weighting
• Not easy to execute
Source: Miller, 1998

33. 33
PORTFOLIO PLANNING: LIFE CYCLE – COMPETITIVE
STRENGTH MATRIX
Key sources: • Arthur D. LittlePush:
Invest agg-
ressively
Caution:
Invest selecti-
vely
Danger:
Harvest
Introduc-
tion
Growth Maturing Decline
Stage of market life cycle
High
Moderate
Low
Competitivestrength
• Hybrid of BCG and
XYZ portfolio planning
models
Goal:
Limitations: • Results are highly
sensitive to percep-
tional change and
modification in
weighting
• Not easy to execute
Source: Miller, 1998

34. 34
PORTFOLIO CONCEPTS: PORTER'S BASIC BELIEFS
Premises of corporate strategy
Essential tests to ensure
that diversification creates
shareholder value
• Competition occurs only at the
business unit level
Diversified companies do not
compete; only their businesses do
• Diversification inevitably adds
costs and constraints to business
units
Corporate overhead creates visible
costs and hidden costs by
introducing and monitoring
constraints
• Shareholders can readily diversify
themselves
Shareholders can easily diversify by
selecting those stocks that best
match their preferences;
shareholders can diversify cheaply
by avoiding acquisition premiums
• The attractiveness test: Chosen
industry structurally attractive or
capable of being made attractive
• The cost-of-entry test: Cost of entry
must not capitalize all future profits
• The better-off test: Either the new
unit must gain competitive advantage
from its link with the corporation or
vice versa
Source: Porter, 1987

35. 35
FOUR DIFFERENT CONCEPTS OF CORPORATE STRATEGY
Description
Forms of
shareholder
value creation
Problems
Portfolio management Restructuring Transferring skills
• Diversification through
acquisitions of attractive
companies with competent
managers
• Acquired units stay
autonomous and continue to
be run by the "old"
management team; purely
passive financial investment
Sharing activities
• Expertise and analytical
resources to identify
attractive acquisition
candidates
• Impossible to buy
undervalued companies in
efficient capital markets
• Large companies no longer
have a competitive
advantage in terms of
management skills
• Diversification through
acquisition of "undeveloped,
sick or threatened"
organizations
• Corporate Center as active
restructurer
• Sell-off after successful
turnaround
• Expertise in finding the
"right" candidates
• Expertise in restructuring
• Strategy is identical with
portfolio management if the
units don't get sold after
restructuring
• Corporate center transfers skills
or expertise among similar
parts of value chains of the
businesses
• Requirements
– The activities involved in
the businesses are similar
enough that sharing
expertise is meaningful
– The transfer of skills
involves activities important
to competitive advantage
– The skills transferred
represent a significant
source of competitive
advantage for the receiving
unit
• Competitive advantage of
businesses because of
transferred skills/expertise
• Transfer of skills is a difficult
process. It does not happen
by accident or osmosis, but by
change of strategy/operations
• Acquisition of companies that
allow the realization of
horizontal synergies on the
basis of value chains
• Shared activities must involve
activities that are significant to
competitive advantage
-
• Lowering costs or raising
differentiation
• Benefits of sharing
activities must outweigh
the costs involved
• Diversification based solely
on sharing corporate
overhead is rarely
appropriate
• Sharing activities
enhances competitive
advantage by lowering
costs (economies of
scale, efficiency or
utilization) or increasing
differentiation
• Sharing must involve
activities that are signifi-
cant to competitive
advantage
• Sharing activities
inevitably involves costs
that the benefits must
outweigh
Source: Porter, 1987

36. 36
ACTION PLAN FOR DEFINITION OF THE CORPORATE STRATEGY
Choosing a corporate strategy (action plan)
A company chooses a corporate strategy by
Identifying the interrelationships between existing business units
Selecting core businesses that will be the foundation of the corporate strategy
Creating organisational mechanisms to facilitate interrelationships among core
businesses that will also lay the groundwork for future diversification
Pursuing diversification that allows shared activities
Pursuing diversification through the transfer of skills (if opportunities for sharing activities
are limited)
Pursuing a strategy of restructuring if this action is in line with management skills
Paying dividends allowing shareholders to be portfolio managers
1.
2.
3.
4.
5.
6.
7.
Source: Porter, 1987

37. 37
DIVERSIFICATION: DIFFERENT FORMS OF DIVERSIFICATION
Horizontal unrelated
• Governance economies
• Competitive
– Divisions are
independent
– Divisions compete
for capital
– Managers compete
for promotion
Related
• Scope
economies
• Cooperative
– Divisions are
interdependent
– Competition is
dysfunctional
Vertical integrated
• Coordination economies
• Constraining
– Divisions are
inter-supportive
– Competition is
dysfunctional
Source: Reynor, 1999
Administra-
tive structure
Corporate
value added
Forms

38. 38
TWO-STEP APPROACH IN DIVERSIFICATION DECISION-MAKING
Financial analysis
• Evaluate financial consequences of
diversification move
Strategic risk and opportunities analysis
• Identify strategic risks and opportunities
connected with diversification move
Diversification
decision-making Focus of
following
discussion
Source: Markides, 1997

39. 39
SIX CRITICAL QUESTIONS FOR DIVERSIFICATION SUCCESS (1/3)
What can the company do better than any of its
competitors in its current market?
What strategic assets does the company need in
order to succeed in the new market?
Can the company catch up or leapfrog competitors
at their own game?
Will diversification break up strategic assets that
need to be kept together?
Will the company be simply a player in the new
market or will it emerge as a winner?
What can the company learn by diversifying and
is it sufficiently organized to learn it??
1
2
3
4
5
6
1
2
3
4
5
6
DIVERSIFICATION
Source: Markides, 1997

40. 40
?
SIX CRITICAL QUESTIONS FOR DIVERSIFICATION SUCCESS (2/3)
What can the company do better than any of its
competitors in its current market?
• The company needs to determine its strategic assets
(its unique and unassailable competitive strengths)
before attempting to apply them elsewhere
• Strategic assets (what does the company do better?)
are different from the current business of the company
(what does it do?)
• By using its strategic assets, the company might add
value to an acquired company or a new market
What strategic assets does the company need in
order to succeed in the new market?
• The company needs to determine whether it has all the
strategic assets necessary to establish a competitive
advantage in the new market
Can the company catch up or leapfrog competitors at
their own game?
• In case necessary strategic assets are missing, the
company might be able to purchase them, develop
them in-house or make them unnecessary by changing
the competitive rules of the game
• The costs of doing so have to be reasonable
1
2
3
1
2
3
4
5
6
DIVERSIFICATION
Source: Markides, 1997

41. 41
?
SIX CRITICAL QUESTIONS FOR DIVERSIFICATION SUCCESS (3/3)
Will diversification break up strategic assets that need to
be kept together?
• Individual strategic assets might not be transferable to the
new environment because they are part of an interrelated
cluster of competencies or skills that work only because
they support and reinforce one another in a particular
competitive context
Will the company be simply a player in the new market or
will it emerge as a winner?
• To achieve a sustainable advantage, diversifying companies
need to create something unique
• Therefore, and in order for the diversification to be
successful, the strategic assets to be deployed in the new
market need to be rare (not available on the open market),
hard to imitate and not easily substituteable
What can the company learn by diversifying and is it
sufficiently organized to learn it?
• A diversification move might have the additional advantage
of allowing the company to learn competencies that can be
reapplied in its exiting businesses or of serving as a
strategic stepping stone to help enter yet another business
• Processes that facilitate and promote learning and transfer
competencies across functions and divisions need to be
installed to reap those advantages of diversification
4
5
6
1
2
3
4
5
6
DIVERSIFICATION
Source: Markides, 1997

42. 42
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

43. 43
VALUE-ORIENTED MANAGEMENT: SYNOPSIS/SUMMARY
Focus
Contri-
butions
Limi-
tations
• Goal of corporate strategy is to increase
shareholder value
• Focus on businesses where the corporate
parent can add value
• Focus is on relationship between parent
organization and the individual businesses
• Corporate strategy has several levers to
pull in order to increase shareholder value
• Shareholder value is defined by free cash
flow and the cost of capital (WACC)
• Parent organization should own only those
businesses where it can add more value than
other parents
• Provides good analytical framework and
valuation approach, but needs to be
complemented with content (strategies,
ideas, vision, actions)
• Value-based management and DCF
valuations usually miss important option
considerations
• Focus on parenting advantage ignores
important linkages between business units
Value-oriented management
Value-based management Parenting advantage
Main
authors
• Rappaport, 1981, 1986; Copeland, Koller
and Murrin, 2000
• Gould, Campbell and Alexander, 1994;
Campbell, Gould and Alexander, 1995
Source: XYZ analysis

44. 44
THE ROAD TO VALUE-BASED MANAGEMENT
Source: Copeland, Koller and Murrin, 2000
• Big, one-time effort to restructure
the corporation in order to
unleash value
Restructure the corporation
Build value-based
management approach
• Continuous/annual process to
instill and develop a value-based
management approach within the
corporation
• Restructuring hexagon • Value activities
Description
Framework

45. 45
RESTRUCTURING HEXAGON
Perceptions
gap
Maximum
opportunity
Operating
improvement
Financial
engineering
Disposal/new
owners
New growth
opportunities
Current
market
value
Value
as is
1
2
3
4
6
5
Total
potential
value
Value with
growth,
internal
improvements
and disposals
Value with
internal
improvements
and disposals
Value with
internal
improvements
Source: Copeland, Koller and Murrin, 2000

46. 46
THE RESTRUCTURING PROCESS
Current market value
Value as is
Value with internal
improvements
Value with internal
improvements and
disposals
Value with growth,
internal improvements
and disposals
Total potential value
• Analyze performance in stock market, underlying financial
performance (returns, earnings), generation and investment of cash
flow, the market's assumption about future performance
• Calculate value as is based on extrapolation of recent historical
performance and based on current business plans
• Identify key value drivers (with sensitivities) of each business and
generate measures to improve operating performance
• Investigate external value of businesses under four scenarios:
sale to strategic buyer (company able to realize operational or strategic
synergies), flotation/spin-off, leveraged buy-out by management of a
third-party, liquidation
• Generate ideas for internal and external growth options
• Optimize the company's financial structure with financial engineering
(rating, debt levels with tax advantages, etc.)
Source: Copeland, Koller and Murrin, 2000

47. 47
AREAS OF ACTIVITY FOR MAKING VALUE HAPPEN
• Combine inspiring aspiration with tough quantitative
targets linked to value creation
• Manage the portfolio through three perspectives on
portfolio management: Exploit the strategic advantages
of the corporation (corporate themes), look for
performance improvement opportunities (restructuring
hexagon) and manage a growth pipeline (three horizons)
• Orient hard (structure, decision rights, people) and soft
elements (beliefs, values, leadership style) of
organization towards value
• Develop superior insights into the key value drivers of
each business
• Manage the performance of the businesses through
sophisticated target setting and performance reviews
• Motivate employees through financial rewards and other
incentives
Individual performance
management
Metrics
Value
thinking
Mindset
Business performance
management
Shareholder
value
Aspirations
and targets
Portfolio management
Organization design
Value driver definition
Source: Copeland, Koller and Murrin, 2000

48. 48
Individual performance
management
Metrics
Value
thinking
Mindset
Business performance
management
Shareholder
value
Aspirations
and targets
Portfolio management
Organization design
Value driver definition
OVERVIEW OF PORTFOLIO MANAGEMENT: THREE PERSPECTIVES
• There are seven corporate themes
or ways in which the corporate
center can add value
• Successful centers create value by
being distinctive in one or two of
these themes
• The hexagon should be used
periodically to look for performance
improvement opportunities
• It helps to quantify and prioritize
the opportunities
• Companies should ensure that
their portfolio includes businesses
in all three stages of development
(core businesses, new businesses,
options to build future businesses)
• Incorporates the important issue of
value creation through profitable
growth (vs. restructuring)
Source: Copeland, Koller and Murrin, 2000
Corporate
theme analysis1
Restructuring
hexagon2
Three growth
horizons
analysis
3

49. 49
CORPORATE THEME ANALYSIS: SEVEN RECURRING
CORPORATE THEMES
• The Industry Shaper repeatedly spots discontinuities in industries
and acts pre-emptively to shape the emerging new industry to its
own advantage
• The Deal Maker systematically beats the market through its superior
skill at spotting and executing deals. This could either be through
superior insight into the inherent value of companies or through
superior insight into specific industries
• The Scarce Asset Allocator efficiently allocates capital, cash, time
and talent across multiple business units
• The Skill Replicator repeatedly transfers particular skills across
business units. The skill of lateral transfer is a distinct skill from the
functional skill itself
• The Performance Manager has proven skills at instilling a high
performance ethic with matching incentives and MIS processes
across multiple business units
• The Talent Agency institutionalizes a model for attracting, retaining
and developing talent that is truly distinctive relative to all others in
the industry
• The Growth Asset Attractor possesses a proven and sustained
record of consistently leading in innovation in multiple businesses
Source: Copeland, Koller and Murrin, 2000
1

50. 50
THREE GROWTH HORIZONS ANALYSIS
• Core businesses • New businesses and
extensions of existing
businesses fuelling future
growth
• Options to build future
businesses
Creating strategic
degrees of freedom
Horizon 1
Horizon 2
Horizon 3
Destiny shaping
decisions
Creating options for
future businesses
Types of
businesses
• Unlock incremental
growth, then manage for
value as the business
declines
• Exercise options,
assemble required
capabilities and drive
business-building
capabilities
• Source options for future
growth and test viability of
business concepts
Management
imperative
• Bottom-line performance
and profitability
• Top-line growth and
capital efficiency
• Future potential and
robustness against
multiple scenarios
Primary focus
Source: Copeland, Koller and Murrin, 2000
3

51. 51
PARENTING ADVANTAGE: DEFINITIONS AND ASSUMPTIONS
Source: Campbell, Goold and Alexander, 1995
Two questions of
corporate strategy
• What businesses should the company – rather than
rival companies – own and why?
• What organizational structure, management processes
and philosophy will foster superior performance from
the businesses?
Parenting advantage
• The ability to create more value by influencing
(= parenting) the businesses of a multi-business
company than any other rival parent
Role of parent
organization
• Intermediary between investors and businesses
• Competes with other parent organizations and other
intermediaries, e.g., investment trusts or mutual funds
Changeability
of parenting
characteristics
• Parenting characteristics are built on deeply held
values and beliefs and, therefore, are hard to change
• Fundamental changes in parenting do rarely occur,
e.g., when the CEO and the senior-management team
are replaced

52. 52
PARENTING ADVANTAGE vs. OTHER CORPORATE STRATEGY
FRAMEWORKS
Growth/share
matrix
Core compe-
tence concept cc
• Balance business
portfolio with a mix of
stars, cash cows and
question marks
Main lesson • Focus on core
businesses around
technical or operational
core competencies and
develop structures and
systems to enhance
them
• Focus on businesses
where the parent
organization can add
value (ideally: more
value than any other
parent)
Parenting
advantage
• Businesses and their
relationship between
each other
Unit of
analysis
• Businesses and their
relationship between
each other
• Relationship between
parent organization
and the individual
businesses
• Cash flow (and profit,
growth)
Nature of
relationship/
focus of
analysis
• Common technical or
operational know-how
of businesses
• Competencies of the
parent organization
and the value it creates
with its businesses
Source: Campbell, Goold and Alexander, 1995

53. 53
PROCESS OF PARENTING ADVANTAGE FRAMEWORK
Explanation
Tool
• Analyze critical
success factors of
the individual
businesses
• High probability of
value destruction
if parent does not
understand the
businesses
(dowside
potential)
• Gives impression
of similarity of
businesses
• Examine potential
for parent to add
value to
businesses
• Parenting
opportunity =
potential for
parent to improve
businesses in
order to add value
(upside potential)
Understand
critical success
factors of
businesses
Identify
parenting
opportunities
Examine
characteristics
of parent and
assess fit with
businesses
Validate fit
assessments
by analyzing
the company's
track record
Develop
portfolio and
parenting
characteristics
• Document
characteristics of
parent organi-
zation
• Compare
characteristics
with critical
success factors
and parenting
opportunities in
each business
• Compare results
of the previous
three steps with
the company's
track record with
different sorts of
businesses
• Summarize
assessments
in parenting-fit
matrix
• Develop portfolio
of businesses
• Adapt parenting
characteristics if
realistic
Parenting
opportunities
checklist
Parenting
opportunities
analyses
Success and
failure analysis
Performance
analysis
Parenting-fit
matrix
Source: Campbell, Goold and Alexander, 1995
1
2
3
4
5

54. 54
TOOL : PARENTING OPPORTUNITIES CHECKLIST
Parenting
opportunity Explanation
– Cut costs and streamline old, large businesses
– Provide skills, management and financial resources for young, small businesses
• Size and age
• Management
• Business
definition
• Predictable errors
• Linkages
• Special expertise
• External relations
• Major decisions
• Major changes
– Provide, attract and retain top-quality management and important specialists
– Correct repetition of predictable errors, e.g., attachment to previous decisions,
excessively long product cycles, overinvestment in cyclical markets, etc.
– Ensure appropriate breadth of target markets, appropriate degree of vertical
integration (especially with outsourcing, alliances, e-commerce trends)
– Establish and/or improve linkages between businesses
• Common
capabilities
– Encourage sharing of capabilities between businesses
– Provide specialized/rare expertise to businesses
– Manage external stakeholders (shareholders, custpmers, government, unions,
suppliers) better than businesses
– Provide help in difficult decisions in areas where the business lacks expertise
– Provide help in change situations where the business management has little
experience
Source: Campbell, Goold and Alexander, 1995
1

55. 55
TOOL : PARENTING OPPORTUNITIES ANALYSES
Major challenges
of business
Do major challenges of a business contain
a parenting opportunity?
Influences of
different parents on
similar business
Have rival parent companies discovered
additional parenting opportunities with
their businesses?
Influences of
parent on business
What are the most important influences of
the parent on a business and do they
address parenting opportunities?
Parenting
opportunities
analyses
Source: Campbell, Goold and Alexander, 1995
2

56. 56
EXAMINATION OF CHARACTERISTICS OF PARENT AND
ASSESSMENT OF FIT WITH BUSINESSES
• Do the characteristics fit the
parenting opportunities
(exploit upside potential)?
• Is there a misfit between
parenting characteristics and
the businesses critical
success factors (downside
potential)?
• Is there a better rival parent
with much larger parenting
opportunities?
• Mental maps of parent managers
Values, aspirations, rules of thumb, biases and success formulas
that guide parent managers in dealing with the businesses
• Corporate structure, management systems and processes
Coordination and linkage mechanisms (e.g., appointment process,
HR systems, budgeting and planning processes) through which the
parent creates value and the managers' interaction within them
• Central functions, services and resources
They support line managers' efforts to create value (e.g., R&D,
purchasing, patents, corporate brand); value creation potential and
thus size of central resources strongly depend on the
circumstances in each business
• Nature, experience and skills of parent managers
E.g., influential and charismatic CEO, very knowledgeable
technical director
• Decentralization contract between parent and business
Defines extent of decentralized responsibilities and authority (e.g.,
in authorization limits, job descriptions, formal statements of due
process, corporate culture)
Parenting characteristics
Assessment of fit
Source: Campbell, Goold and Alexander, 1995

57. 57
TOOLS AND TO VALIDATE THE ASSESSMENT OF FIT
• Analyze the company's track
record with different sorts of
businesses
• Step 1: List important decisions
• Step 2: Classify each decision
as success, failure or neutral
• Step 3: Group decisions by
type (e.g., key appointments,
new product launches,
acquisitions) and time period
• Step 4: Draw conclusions
about strengths and
weaknesses in parenting
influences
Success and failure analysis
• Review performance of each
business in comparison with
competitors
• Profitability much higher or
lower than the competitive
level is strong indication of
a parent's influence (other
important influences might
exist, though)
Performance analysis
Judgement
of fit
correct?
Source: Campbell, Goold and Alexander, 1995
3 4

58. 58
TOOL : PARENTING-FIT MATRIX
Ballast
Edge
of
heart-
land
Heartland
Alien territory
Low High
Fit between parenting opportunities and
parenting characteristics
High
LowMisfitbetweencriticalsuccessfactors
andparentingcharacteristics
Value trap
Source: Campbell, Goold and Alexander, 1995
5

59. 59
RECOMMENDATIONS FOR PORTFOLIO BUSINESSES
ON PARENTING-FIT MATRIX
• Heartland businesses should be at the heart of the company's future and
have priority in portfolio development
• Parenting characteristics that fit its heartland businesses should form the
core of the parent organization
Heartland
• Parent both creates and destroys value, the net contribution might not be
clear-cut
• Edge-of-heartland businesses might move into heartland if the parent learns
enough about the critical success factors to avoid destroying value (either by
changing its behavior or by changing the business' strategy)
Edge of
heartland
• Mostly old businesses that have been owned by the parent for a long time
• Those businesses can represent important sources of stability
• Alternatively, businesses can be a drag, slowing growth and distracting parents
• Should be sold to competitor if he is the better parent and price larger than
DCF
Ballast
• Large potential for value destruction
• Should be quickly divested to better parent
Alien
territory
Value trap
• Fit in parenting opportunities but misfit in critical success factors: Both
some upside as well as large downside potential exists
• Sometimes a result of a diversification path following a core competence
logic
Source: Campbell, Goold and Alexander, 1995

60. 60
ROLE OF THE PARENT
Parenting styles Successful parents
Three main styles of parenting emerge
when examining fit between the parent
and business
Keys to being a successful parent include
• Focusing on parenting opportunities that
are significant and therefore create major
value
• Focusing on opportunities that others
have not noticed
• Having deep understanding of why
specific improvements exist and how to
exploit the improvements
1.
2.
3.
Strategic planning – parent closely
involved with businesses in developing
plans and strategies; focuses on long-
term profit goals
Strategic control – parent seeks balance
between strategic planning and financial
control
Financial control – parent decentralizes
responsibility for development of plans
and strategies to businesses; focuses on
short-term profit goals
Source: Goold, Campbell and Alexander, 1994

61. 61
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Resources and capabilities
– Portfolio management
– Value-oriented management
– Aspiration-based management
• Bibliography

62. 62
ASPIRATION-BASED MANAGEMENT: SYNOPSIS/SUMMARY
Focus
Contri-
butions
Limi-
tations
• The goals of a company extend beyond the performance objective of shareholder value
maximization to a sense of overall purpose that shapes strategy and unifies the efforts of the
organization
• In order to provide motivation and direction to their employees, companies should create an
inspiring vision and mission
• Vision and mission represent the overarching starting point and ultimate benchmark for
corporate strategy development
• Success of aspiration-based management is highly dependent on the credibility and behavior of
top management ("walk your talk")
• Having a formal mission statement is not enough in itself; a "sense of mission" is necessary
Aspiration-based management
Vision, mission and objectives
Main
authors
• Campbell and Devine, 1990; Bleicher, 1994
Source: XYZ analysis

63. 63
THE HIERARCHY OF STRATEGIC INTENT
Source: Johnson and Scholes, 1999; Lynch, 2000; Miller, 1998
Most integrative,
fewest in number
Most specific,
greatest in number
Vision
Mission
Goals and
objectives
Desired future state, the aspiration
of the organization
Outline of the broad directions that the orga-
nization should follow together with a brief
summary of the reasons and values behind it
More precise statements of what is to be
achieved and when results are to be
accomplished (often quantified)

64. 64
THREE FUNCTIONS OF A VISION
Identity
The vision descibes
a unique future state
of the organization
Identification
The vision provides
purpose to the employees
and enables identification
Mobilization
The vision should inspire
employees to try to achieve
the desired future state
Source: Bleicher, 1994
Vision

65. 65
THE CONTEXT OF A STRATEGY
Purpose
Why the com-
pany exists
Strategy
The competitive
position and
distinctive
competences
Behavior standards
The policies and behavior
patterns that underpin the
distinctive competence
and the value system
Source: Adapted from Campbell and Devine, 1990
Values
What the company
believes in
Development and
implementation of a
strategy is heavily
influenced by its
context

66. 66
CONTENTS
• What is corporate strategy?
– Definition
– History and development
• Schools of thought
– Aspiration-based management
– Resources and capabilities
– Portfolio management
– Value-oriented management
• Bibliography

67. 67
BIBLIOGRAPHY (1/3)
Works cited
• Andrews, K. R. 1951. Product Diversification and the Public Interest. Harvard Business
Review (July-August): 91-107.
• Andrews, K. R. 1980. Directors' Responsibility for Corporate Strategy. Harvard Business
Review (November-December): 30-42.
• Bleicher, K. 1994. Normatives Management. Frankfurt: Campus.
• Campbell, A. and M. Devine. 1990. A Sense of Mission. London: Random House.
• Campbell, A., M. Goold and M. Alexander. 1995. Corporate Strategy: The Quest for
Parenting Advantage. Harvard Business Review (March-April): 120-132.
• Collis, D. J. and C. A. Montgomery. 1998. Creating Corporate Advantage. Harvard Business
Review (May-June): 71-83.
• Copeland, T., T. Koller and J. Murrin, 2000. Valuation: Measuring and Managing the Value
of Companies. 3rd ed. New York: John Wiley.
• Goold, M., A. Campbell and M. Alexander. 1994. Corporate-Level Strategy: Creating Value
in the Multibusiness Company. New York: John Wiley.
• Goold, M. and K. Luchs. 1993. Why diversify? Four decades of management thinking.
Academy of Management Executive 7 (no. 3): 7-25.
• Haspeslagh, P. 1982. Portfolio Planning: Uses and Limits. Harvard Business Review
(January-February): 58-73.

68. 68
BIBLIOGRAPHY (2/3)
Works cited
• Henderson, B. D. 1979. Henderson on Corporate Strategy. Cambridge: Abt Books/The
Boston Consulting Group.
• Johnson, J. and K. Scholes. 1999. Exploring Corporate Strategy: Text and Cases. 5th ed.
London: Prentice Hall.
• Lynch, R. 2000. Corporate Strategy. 2nd ed. London: Prentice Hall.
• Markides, C. 1997. To Diversify or Not to Diversify. Harvard Business Review (November-
December): 93-99.
• Miller, A. 1998. Strategic Management. 3rd ed. Boston: Irwin McGraw-Hill.
• Porter, M. E. 1987. From Competitive Advantage to Corporate Strategy. Harvard Business
Review (May–June): 43-59.
• Prahalad, C. K. and G. Hamel. 1990. The Core Competence of the Corporation. Harvard
Business Review (May-June): 79-91.
• Rappaport, A. 1981. Selecting Strategies That Create Shareholder Value. In Strategy:
Seeking and Securing Competitive Advantage, 3rd ed., ed. C. A. Montgomery and M. E.
Porter, 379-399. Boston: Harvard Business School Press.
• Rappaport, A. 1986. Creating Shareholder Value: The New Standard for Business
Performance. New York: Free Press.

69. 69
BIBLIOGRAPHY (3/3)
Works cited
• Reynor, M. E. 1999. Hidden in Plain Sight: Hybrid Diversification, Economic Performance and
'Real Options' in Corporate Strategy. Harvard Business School Paper, presented at the
Strategic Management Society Conference in Berlin.
• Stalk, G., P. Evans and L. E. Shulman. 1992. Competing on Capabilities: The New Rules for
Corporate Strategy. Harvard Business Review (March-April): 57-69.
• Thomson, A. A., A. J. Strickland and J. Thomson. 1999. Strategic Management. Boston:
McGraw-Hill.
• Wernerfelt, B. 1984. The Resource-based View of the Firm. Strategic Management Journal 5
(no. 2): 171-180.