33:620:492 Lecture Notes - Lecture 8: Market Power, Vertical Integration, Cash Flow
2 Apr 2016
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Document Summary
Corporate-level strategy: focuses on building value by managing operaions in muliple businesses, addresses two issues: What businesses should a corporaion paricipate in. How can these businesses be managed so they create synergy . Diversiicaion: diversiicaion is the expansion of operaions by entering new businesses or product lines, two types of diversiicaion. Oten seen when a company diversiies into a part of the value chain. Diversifying into acivity that is unrelated to exising business(es: levels of diversiicaion. Single business: 95% of more of revenue comes from a single business: e. g. Dominant business: between 70% and 95% of revenue comes from a single business. Less than 70% of revenue comes from the dominant business: reasons to diversify. Sharing of resources: if relatedness exists across business units, value can be created by sharing resources or aciviies: Value created when shared corporate resource is a core competence. Conferring an intangible core competence to another business unit: by deiniion, core competencies are:
