“Corporate Strategy: Diversification and the multibusiness company”. Chapter 8 moves up one level in the strategy-making hierarchy, from strategy making in a single business enterprise to strategy making in a diversified enterprise. The chapter begins with a description of the various paths through which a company can become diversified and provides an explanation of how a company can use diversification to create or compound competitive advantage for its business units. The chapter also examines the techniques and procedures for assessing the strategic attractiveness of a diversified company’s business portfolio and surveys the strategic options open to already-diversified companies.
As a supplemental material, read the case 16 (from your textbook) “Sara Lee Corp. in 2011: Has Its Retrenchment Strategy Benefitted Shareholders?”. Attached to find the comments of the case based on its questions. Study the answers carefully to get deeper insights regarding diversification.
1. Using your university library’s subscription* to Lexis-Nexis, EBSCO, ceoexpress.com or a similar database, perform a search on “acquisition strategy.” Identify at least two companies in different industries that are using acquisitions to strengthen their market positions. How have these acquisitions enhanced the acquiring companies’ competitive capabilities?
*Follow this to access the FNU electronic database: www.fnu.edu/academic/library/LIRN and type 24439, go to Business, and select a database and find the information. If no information is found in here, then google it, or use an alternative source as mentioned in the exercise instruction.
2. Go to (www.google.com), and do a search on “outsourcing.” Identify at least two companies in different industries that have entered into outsourcing agreements with firms with specialized services. In addition, describe what value chain activities the companies have chosen to outsource. Do any of these outsourcing agreements seem likely to threaten any of the companies’ competitive capabilities? Are the companies using strategic alliances to manage their outsourcing? Note: The following companies should not be considered for this answer: IBM, Grupo Gigante (Mexico), NCR Corporation, and Co-op Financial Services.
3. See attached exercises. Open and answer them after studying diversification.
1. APA written report based on the questions 1, 2 and 3 by the deadline below.