GBA 490 Lecture 8: Chapter 8
29 Mar 2020
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Chapter 8 powerpoint: pick new industries to enter and decide on means of entry, pursue opportunities to leverage cross business value chain relationships, establish investment priorities. Strategic diversification options diversify into related business diversify into unrelated businesses diversify into both. Related business possess competitively valuable cross-business value chain and resource matchups. Unrelated business dissimilar value chains and resource requirements, with no competitively important cross-business relationships at the value chain level. Retrenching to a narrower scope of diversification. Broadly restructuring the entire firm by divesting some businesses. A firm should consider diversifying when : growth opportunities are limited, changing industry conditions are undermining the firm"s competitive position. Diversification cannot be considered wise or justifiable unless it results in added long-term economic value for shareholders value they cannot get on their own. Transaction costs costs of completing a business agreement, not including the price of the actual deal.
