1. The document discusses corporate level strategy and diversification. Diversification is a primary corporate strategy where firms enter new industries through acquisition, internal development, or joint ventures.
2. Firms diversify to utilize excess resources, gain economies of scale, and spread risk. Related diversification captures synergies across related business units while unrelated diversification spreads risk across diverse industries.
3. International expansion allows firms to access new customers and resources while spreading risk globally. Firms can enter foreign markets through various modes from exporting to acquisitions.
Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to-
prioritize efforts,
effectively allocate resources,
align shareholders and employees on the organization’s goals, and
ensure those goals are backed by data and sound reasoning.
Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to-
prioritize efforts,
effectively allocate resources,
align shareholders and employees on the organization’s goals, and
ensure those goals are backed by data and sound reasoning.
In this lesson you learned about the the challenges of strategic management. You learned that internationalization, e-commerce, knowledge and learning all present unique challenges to strategic management. You also learned that executing strategy is an operationally-driven activity.
CH- 3 CONCEPTUAL FRAMEWORK OF CORPORATE GOVERNANCE Bibek Prajapati
CH- 3 CONCEPTUAL FRAMEWORK OF CORPORATE GOVERNANCE
FOR CS PROFESSONAL, CA, CMA
Definitions of Corporate Governance
• ICSI Principles of Corporate Governance
• Need for Corporate Governance
• Theories of Corporate Governance
• Evolution and Development of Corporate Governance
• Elements of Good Corporate Governance
The root of the word Governance is from ‘gubernate’, which means to steer. Corporate governance would mean to steer an organization in the desired direction. The responsibility to steer lies with the board of directors/governing board.
• Kautilya’s Arthashastra maintains that for good governance, all administrators, including the king were considered servants of the people. Good governance and stability were completely linked. There is stability if leaders are responsive, accountable and removable. These tenets hold good even today.
• Corporate Governance Basic theories: Agency Theory; Stock Holder Theory; Stake Holder Theory; Stewardship Theory
OECD has defined corporate governance to mean “A system by which business corporations are directed and controlled”. Corporate governance structure specifies the distribution of rights and responsibilities among different participants in the company such as board, management, shareholders and other stakeholders; and spells out the rules and procedures for corporate decision making. By doing this, it provides the structure through which the company’s objectives are set along with the means of attaining these objectives as well as for monitoring performance.
Product Portfolio Strategies, BCG Matrix, How to make a BCG Matrix, Apple case study, BCG AND PLC, Merits and Demerits of BCG Matrix, GE Matrix, Merits and Demerits of GE Matrix
In this lesson you learned about the the challenges of strategic management. You learned that internationalization, e-commerce, knowledge and learning all present unique challenges to strategic management. You also learned that executing strategy is an operationally-driven activity.
CH- 3 CONCEPTUAL FRAMEWORK OF CORPORATE GOVERNANCE Bibek Prajapati
CH- 3 CONCEPTUAL FRAMEWORK OF CORPORATE GOVERNANCE
FOR CS PROFESSONAL, CA, CMA
Definitions of Corporate Governance
• ICSI Principles of Corporate Governance
• Need for Corporate Governance
• Theories of Corporate Governance
• Evolution and Development of Corporate Governance
• Elements of Good Corporate Governance
The root of the word Governance is from ‘gubernate’, which means to steer. Corporate governance would mean to steer an organization in the desired direction. The responsibility to steer lies with the board of directors/governing board.
• Kautilya’s Arthashastra maintains that for good governance, all administrators, including the king were considered servants of the people. Good governance and stability were completely linked. There is stability if leaders are responsive, accountable and removable. These tenets hold good even today.
• Corporate Governance Basic theories: Agency Theory; Stock Holder Theory; Stake Holder Theory; Stewardship Theory
OECD has defined corporate governance to mean “A system by which business corporations are directed and controlled”. Corporate governance structure specifies the distribution of rights and responsibilities among different participants in the company such as board, management, shareholders and other stakeholders; and spells out the rules and procedures for corporate decision making. By doing this, it provides the structure through which the company’s objectives are set along with the means of attaining these objectives as well as for monitoring performance.
Product Portfolio Strategies, BCG Matrix, How to make a BCG Matrix, Apple case study, BCG AND PLC, Merits and Demerits of BCG Matrix, GE Matrix, Merits and Demerits of GE Matrix
Generation and Screening of Project Ideas Vivek Goyal
It is contain all about Generation of ideas, How to monitoring the environment, corporate appraisal, Profit potential of industries, Porter Models, Scouting of projects ideas, preliminary Screening, Project rating Index, sources of Positive Net present Value, On being an Entrepreneur
1
CHAPTER
2
THE EXTERNAL ENVIRONMENT:
OPPORTUNITIES, THREATS, INDUSTRY COMPETITION
AND COMPETITOR ANALYSIS
Opening remarks
Company’s strategic actions are affected by
External environment
Internal environment
External environment is the source of:
Opportunities
Threats
The need for monitoring and analyzing external environment
The pace of change
Complexity
Uncertainty
2
The general, industry and competitor
analysis
3
General environment – broader society dimensions ( 7 dimensions)
Demographic, economic, political/legal, sociocultural, technological, physical and global
Out of firm’s control so must monitor and gather information
Industry environment – factors in competitive environment
Threat of new entrants, power of suppliers, power of buyers, threat of product substitutes, intensity of rivalry among competitors
Firm must assess industry’s opportunities for profit potential
Competitor analysis or competitive intelligence – the way firm’s can gather and analyze information on the industry competitors
Identifying their actions, responses and intentions
These three analyses influence and are influenced by the firm’s vision, mission and strategic actions
The general, industry and competitor environments
4
Three External Environments include:
General
Industry
Competitor
Segments of the general environment
5
DEMOGRAPHIC
Population size
Geographic distribution
ECONOMIC
Nature and direction of the economy in which a firm competes or may compete
SOCIO-CULTURAL
Refers to potential and actual changes in the physical environment and business practices that are intended to positively respond to and deal with those changes
Age structure
Ethnic mix
Income distribution
POLITICAL/LEGAL
PHYSICAL
TECHNOLOGICAL
GLOBAL
Arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding the interactions among nations as well as between firms and various local governmental agencies
Concerned with a society's attitudes and cultural values
Includes the institutions and activities involved with creating new knowledge and translating that knowledge into new products, processes, and materials
Includes relevant new global markets, existing markets that are changing, important international political events, and critical cultural and institutional characteristics of global markets
External environmental analysis
6
The objective of this analysis is identification of
Opportunities and
Threats
Opportunity – a condition in the external environment that helps a company achieve strategic competitiveness, if exploited
Threat – a condition in the external environment that may diminish company’s efforts towards achieving strategic competitiveness
The four-step process includes
Scanning
Monitoring
Forecasting
Assessing
1. Scanning
Studying all the segments of the general environment
Early signals of changes an ...
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
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• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
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Learn how to use Binance Savings to expand your bitcoin holdings. Discover how to maximize your earnings on one of the most reliable cryptocurrency exchange platforms, as well as how to earn interest on your cryptocurrency holdings and the various savings choices available.
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Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
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This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
Company Valuation webinar series - Tuesday, 4 June 2024
product mix
1. 1
Diversification and Corporate Strategy
Corporate Level Strategy – the strategy for a
company and all of its business units as a whole
Diversification – the primary approach to
corporate level strategy
Diversified firms vary according to
Level of diversification
Degree of relatedness
2. 2
Four Main Tasks in
Crafting Corporate Strategy
Pick new industries to enter and decide on
means of entry
Initiate actions to boost combined
performance of businesses
Pursue opportunities to leverage cross-
business value chain relationships and
strategic fits into competitive advantage
Establish investment priorities, steering
resources into most attractive business units
3. 3
Why do Firms Diversify?
When they have excess resources, capabilities,
and core competencies that have multiple uses
Diminishing growth prospects in present
industry
Cost saving opportunities
Capture strategic fits
Capture financial economies
Spread business risk
Leverage brand name
4. 4
Building Shareholder Value
Ultimate justification for diversifying
A diversification move must pass three tests
The industry attractiveness test
The cost-of-entry test
The better-off test
5. 5
Making the Diversification Decision
Decision to Diversify Requires Two Additional
Decisions:
Level and Degree of Diversification
Number and Relatedness
Mode of Diversification
Acquisition, Internal Development, Joint
Venture
6. 6
Major Corporate Level Strategies
Single Business
Dominant Business
Related Diversification
Unrelated Diversification
7. 7
What is Related Diversification?
Involves diversifying into businesses whose
value chains possess competitively
valuable “strategic fits” with the value
chain(s) of the present business(es)
Capturing the “strategic fits” makes
related diversification a 1 + 1 = 3
phenomenon
8. 8
Examples of Related Diversification?
Proctor and Gamble (distribution/marketing)
Provides branded consumer goods products worldwide
3 GBUs
Beauty GBU
Beauty segment
Grooming segment
Health and Well-Being GBU
Health Care segment
Snacks, Coffee, and Pet Care segment
Household Care GBU
Fabric Care and Home Care segment
Baby Care and Family Care segment
9. 9
Examples of Related Diversification?
Johnson and Johnson
Engages in the research and development, manufacture, and sale of various
products in the health care field worldwide
3 segments
Consumer segment
Products for baby care, skin care, oral care, wound care, and women’s
health care fields, as well as nutritional and over-the-counter
pharmaceutical products
Pharmaceutical segment
Products for anti-infective, antipsychotic, cardiovascular, contraceptive,
dermatology, gastrointestinal, hematology, immunology, neurology,
oncology, pain management, urology, and virology
Medical Devices and Diagnostics segment
Products for circulatory disease management, orthopaedic joint
reconstruction and spinal care, wound care and women’s health,
minimally invasive surgical, blood glucose monitoring and insulin
delivery, and diagnostic products, as well as disposable contact lenses
10. 10
Examples of Related Diversification?
Campbell Soup Company
Engages in the manufacture and marketing of branded
convenience food products worldwide
4 segments
U.S. Soup, Sauces, and Beverages
Baking and Snacking
International Soup, Sauces, and Beverages
North America Foodservice
Upjohn (R&D/product)
Human and Agricultural
Laser Company (technology)
Defense, Health Care, Manufacturing
11. 11
Strategic Appeal of Related Diversification
Capture Strategic Fits/Synergies/Scope
Economies
Strategic fits along value chain
Cost reductions
Spread investor risks over a broader base
Preserves strategic unity in its business
activities
Achieve consolidated performance greater than
the sum of what individual businesses can earn
operating independently
12. 12
Involves diversifying into businesses with
No strategic fit
No meaningful value chain
relationships
No unifying strategic theme
Approach is to venture into “any business
in which we think we can make a profit”
Firms pursuing unrelated diversification are
often referred to as conglomerates
What is Unrelated Diversification?
13. 13
Example of Unrelated Diversification?
W. R. Grace
Chemicals
Coal Mining
Oil and Gas Extraction
Food Manufacturing
Paper Products
Health Services
14. 14
Example of Unrelated Diversification?
United Technologies Corporation
Provides technology products and services to the building
systems and aerospace industries worldwide
Otis segment – elevators and escalators
Carrier segment – air conditioning and refrigeration
UTC Fire and Security segment.
Pratt and Whitney segment - aircraft engines; parts
and services
Hamilton Sundstrand segment - aerospace products
and aftermarket services
Sikorsky segment – helicopters
UTC also engages in the development and marketing
of distributed generation power systems and fuel cell
power plants for stationary, transportation, space, and
defense applications
15. 15
Example of Unrelated Diversification?
Textron, Inc.
Operates in the aircraft, industrial, and finance
industries worldwide.
4 segments
Bell – helicopters plus parts and service
Cessna – general aviation aircraft
Industrial – auto parts, food containers,
hydrolics, golf carts
Finance – aircraft finance, asset-based
lending, distribution finance, golf finance, resort
finance
16. 16
Diversification and Shareholder Value
Related Diversification
A strategy-driven approach to creating
shareholder value
Unrelated Diversification
A finance-driven approach to creating
shareholder value
17. 17
Dominant-business firms
One major core business accounting for 50 - 80 percent
of revenues, with several small related or unrelated
businesses accounting for remainder
Narrowly diversified firms
Diversification includes a few (2 - 5) related or
unrelated businesses
Broadly diversified firms
Diversification includes a wide collection of either
related or unrelated businesses or a mixture
Multibusiness firms
Diversification portfolio includes several unrelated
groups of related businesses
Combination Related-Unrelated
Diversification Strategies
18. 18
STRATEGIES FOR ENTERING NEW
BUSINESSES
Acquisition
Internal new
venture (start-up)
Joint venture
Diversifying into
New Businesses
19. 19
Evaluating the Strategy of a Diversified
Company
Step 1: Assess attractiveness of each industry firm
competes in
Step 2: Assess competitive strength of firm’s business
units
Step 3: Check competitive advantage potential of cross-
business strategic fits among business units
Step 4: Check whether firm’s resources fit requirements
of present businesses
Step 5: Rank performance prospects of businesses and
assign a priority for resource allocation
Step 6: Craft new strategic moves to improve overall
company performance
20. 20
Figure 8.6 Strategy Options for a
Firm That Is Already Diversified
Stick with
the Existing
Business
Lineup
Broaden the
Diversification
Base with New
Acquisitions
Divest and
Retrench to
a Narrower
Diversification
Base
Restructure
through
Divestitures
and
Acquisitions
Strategy Options for a Firm
That Is Already Diversified
21. 21
Why Firms Expand Globally
Gain access to new customers
Achieve lower costs and enhance
competitiveness
Capitalize on core competencies
Spread business risk across wider market
base
Access to raw materials
Exchange rate fluctuations
Trade policies – tariffs
22. 22
Cross Country Differences
Cultures and lifestyles
Market demographics
Market conditions
Growth rate
Distribution systems
Need for responsiveness
Location advantages
Exchange rates
Host government restrictions
24. 24
Strategy (Mode) Options for International Markets
Exporting
Maintain national production and export
goods to foreign markets
Licensing
Allow foreign firms to produce and
distribute your product or use your
technology
Franchising
Similar to licensing
More suited to services and retailers
25. 25
Strategy (Mode) Options for International Markets
Acquisition / Merger
Acquire or merge with company
competing in foreign market
Greenfield Venture / Internal Development
Start up new business unit and use it to
enter in to foreign market
Strategic Alliances and Joint Ventures
Combine resources with foreign
partner(s)
26. 26
Strategy Options for International Markets
Multicountry
Think-local, act-local
Tailor strategy to each country
Global
Think-global, act-global
Pursue same basic strategy worldwide
Transnational
Think-global, act-local
Combination global-local strategy
27. 27
Building Competitive Advantage
in Foreign Markets
Locating activities
Transferring of competencies to foreign
markets
Coordinating cross-border activities
Profit sanctuaries
Cross-market subsidization
28. 28
Competing Internationally Versus
Competing Globally
International
Compete in a select few foreign markets
Global
Has or pursue a market presence on most
continents and in all major countries