This document outlines key concepts related to corporate strategic choices including vertical integration, corporate diversification, corporate strategy, and parenting styles. It discusses vertical integration strategies used by companies like Zara to gain competitive advantages through fast fashion. Corporate diversification is explored through Ansoff's Matrix and the diversification approaches used by Virgin Group across different industries. Parenting styles of companies like Virgin, Berkshire Hathaway, Zara, and Tesco are examined using the parenting matrix to understand how the corporate parent impacts strategic scope and portfolio decisions.

1. CORPORATE STRATEGIC CHOICES
Strategic Analysis:
Where do we want to be?

2. Presentation Outline
 Vertical Integration.
 Corporate Decisions Relating To Scope.
 Corporate Diversification.
 Corporate Strategy.
 Parenting Styles & Rationales.
 Corporate Decisions Relating To Portfolio.

3. Vertical Integration
• Backward and Forward Integration
• Reduced Transactional Costs
• Zara = Fast Fashion (Competitive Advantage)
• Zara vs. H&M vs. Gap

4. Zara: Exception To The Rule
 Vertical integration is in extinction in the
consumer economy but Zara is a spectacular
exception to the rule (Richard Hyman).
 Self-reinforcing Strategy (Two weeks shelf life)
 Cultural Phenomenon of Instant Fashion.

5. Zara: The Art of Supply Chain
Management

6. Corporate Diversification
• Strategy of Diversification
• Product Development
• Market Penetration
• Market Development
• Diversification (Related & Unrelated)

7. Key concepts in Corporate
Diversification
 Virgin Seeking New Products & New Market
 The Ansoff Matrix

8. BCG Matrix & The Virgin Group
RAILWAY
FLIGTHS
ENTERTAINMENT
FINANCE
SHOPPING
MEDIA & TELECOMUNICATION
SOCIAL &
ENVIRONMENT
VIRGIN COLA

9. Corporate Strategy
Corporate Synergy
Geographical Scope (International Markets)
The Corporate Parent and Value Creation to
Different SBU’s

10. Value Adding/Destroying Activities
of Corporate Parents
Case study on the parenting styles of the following diversified companies:
oVirgin Group
oBerkshire Hathaway
oZara Inc.
oTesco
The Parenting Matrix
Goold et al, 1994

11. Elements of Corporate Strategy
Johnson, Whittington and Scholes,
Parenting styles may
impact how wide the
corporate scope is,
while the scope in
itself may reflect
limitations of the
parenting styles.
Portfolio matrices is
used to identify
attractive areas to
diversify into as scope
increases. This helps
to highlight
underperforming units
and thus may lead to
scope reduction
By emphasising the lack of
fit between subunits and
parent, portfolio matrix
may lead to change in
parenting style thereby
impacting upon the
decisions made.

12. Corporate Parenting Styles

13. What is Good Corporate Strategy?
Richard Rumelt – Harvard Business School.