ADMS 4900 Chapter Notes - Chapter 6: Vertical Integration, Duracell, Market Power
28 Jan 2017
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Chapter 6: corporate-level strategy creating value through. Diversification initiatives whether through mergers and acquisitions, strategic alliances and joint ventures, or internal development must be justified by the creation of value for owners. Related diversification: economies of scope and revenue enhancement. Related diversification enables a firm to benefit from relationships across different businesses within the diversified corporation by leveraging core competencies and sharing activities, also called economies of scope. Leveraging core competencies transferring accumulated skills and expertise across business units in a corporation. Core competencies reflect the collective learning in organizations how to coordinate diverse production skills, integrate multiple streams of technology, and market and merchandise diverse products and services. Davidson"s exceptionally strong brand image and merchandising and licensing skills: the core competence must be difficult for competitors to imitate or find substitutes for. Sharp"s core competencies in opto- electronics technologies that are difficult to replicate. Sharing activities corporations can achieve synergy by sharing activities across their business units.
