B. evaluating the strategic fits and resource fits among the various sister businesses. What makes related diversification an attractive strategy is the. C. A producer of canned soups acquiring a maker of breakfast cereals. E. company is under the gun to create a more attractive and cost-efficient value chain. D. There is a better than even chance that investing in the cash hog will result in it becoming a star business with a strong or market-leading competitive position in a high growth market and high levels of profitability. Diversification merits strong consideration whenever a single-business company ltd. Buy the Full Version. Economies of scope, however, stem directly from cost-saving strategic fits along the value chains of related businesses that allow sister businesses to operate more cost efficiently as part of the same company than they can operate as stand-alone businesses.
- Diversification merits strong consideration whenever a single-business company product page
- Diversification merits strong consideration whenever a single-business company info
- Diversification merits strong consideration whenever a single-business company india
- Diversification merits strong consideration whenever a single-business company ltd
- Diversification merits strong consideration whenever a single-business company nyse
- Diversification merits strong consideration whenever a single-business company.com
- Diversification merits strong consideration whenever a single-business company login
Diversification Merits Strong Consideration Whenever A Single-Business Company Product Page
The better-off test, the competitive advantage test, the profit expectations test and the shareholder value test. Business units that consistently earn above-average returns on investment and have bigger profit margins than their rivals usually have stronger competitive positions. A. in R&D and technology activities only. E. corporate executives want to divest some businesses and retrench to a narrower diversification base. Attractive- ness Rating. E. there are attractive strategic fits between the value chains of the company's present businesses and the value chain of the new business it is considering entering. E. will benefit shareholders due to gains in earnings per share and faster stock price appreciation. B. opportunity to convert the competitive advantage potential into 1 + 1 = 3 gains in shareholder value. Diversification merits strong consideration whenever a single-business company info. Across its present businesses?
Diversification Merits Strong Consideration Whenever A Single-Business Company Info
Restructuring is also undertaken when a newly appointed CEO decides to redirect the company. Do any of the company's individual businesses present financial challenges in contributing adequately to the company's financial performance and overall well-being? Other business units, despite adequate financial performance, may not mesh as well with the rest of the firm as was originally thought. A. staying abreast of what's happening in each industry and subsidiary. Diversification merits strong consideration whenever a single-business company product page. Search inside document.
Diversification Merits Strong Consideration Whenever A Single-Business Company India
For a company to make the best use of its limited pool of resources, both financial and nonfinancial, top executives must be diligent in steering resources to those businesses with the best opportunities and performance prospects, and allocating only minimal resources to businesses with weak prospects. Whether and how to incorporate use of Internet technology applications in performing various internal value chain activities. C. Cross-business strategic fit benefits are not automatically realized; the benefits materialize only after management has successfully pursued internal actions to capture them. Indeed, a strategy of multinational diversification contains more competitive advantage potential (above and beyond what is achievable through a particular business's own competitive strategy) than any other diversification strategy. N When it can leverage existing resources and capabilities by expanding into businesses where these same resources and capabilities are key success factors and valuable competitive assets. The size of each bubble is scaled to what percentage of revenues the business generates relative to total corporate revenues. C. Diversification merits strong consideration whenever a single-business company A. has integrated - Brainly.com. How to draw traffic to its Web site and then convert page views into revenues. How to deliver unique value to buyers. Such advantages explain why such consumer products companies as Procter & Gamble, Unilever, Nestlé, Kimberly-Clark, Colgate-Palmolive, and Coca-Cola employ a strategy of multinational diversification.
Diversification Merits Strong Consideration Whenever A Single-Business Company Ltd
N Which of the company's industries are most attractive, and which are least attractive? 0, it is fair to conclude that its business units are all fairly strong market contenders in their respective industries. An electrical equipment manufacturer acquiring an athletic footwear company. E. potential young stars is sufficient to help stars. B. builds shareholder value. D. have a quantitative basis for rating them from strongest to weakest in contending for market leadership in their respective industries. And, as emphasized earlier, when a corporate parent has nonfinancial resources that particular business units will find uniquely valuable in strengthening their performance and/or accelerating their growth, allocating such resources to these business units should be automatic—they usually represent 1 + 1 = 3 opportunities that should not be missed. Four other instances that signal the for diversifying: When it can expand into industries whose. Chapter 8 • Diversification Strategies 184. n Industry profitability. It can achieve multibusiness/multi-industry status by acquiring an existing company already in a business/industry it wants to enter, forming its own new business subsidiary to enter a promising industry, and/or forming a joint venture with one or more companies to enter new businesses. C. resource requirements and the presence of cross-industry strategic fits.
Diversification Merits Strong Consideration Whenever A Single-Business Company Nyse
However, there are four other instances in which a company becomes a prime candidate for diversifying:1. n When it spots opportunities for expanding into industries whose technologies and/or products complement its present business. 0 a business unit's relative market share is, the weaker its competitive strength and market position vis-à-vis rivals. C. when adding new production capacity will not adversely impact the supply/demand balance in the industry. When evaluating strategic fit benefits that related diversification can deliver, one must keep in consideration a number of factors. The Case for Diversifying into Unrelated Businesses Whereas related diversification strategies seek to build shareholder value by diversifying only into businesses with important cross-business strategic fits, the hallmark of unrelated diversification strategies is managerial willingness to enter any industry and operate any business where company executives see opportunity to realize consistently good financial results. A. they have several key suppliers and several key customers in common. B. companies offering the biggest potential to reduce labor costs.
Diversification Merits Strong Consideration Whenever A Single-Business Company.Com
Evaluate the relative competitive strength of each of the company's business units. A. the firm is missing some essential skills or capabilities or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps. Diversification Strategy Options. In some businesses, the volume of sales needed to realize full economies of scale and/or benefit fully from experience and learning-curve effects exceeds the volume that can be achieved by operating within the boundaries of just one or several country markets, especially small ones. 0% found this document useful (0 votes). 0% found this document not useful, Mark this document as not useful. As a result, BTR decided to divest its distribution businesses and focus exclusively on diversifying around small industrial manufacturing. Sister businesses performing closely related value chain activities may seize opportunities to join forces, share knowledge and talents, and collaborate to create altogether new capabilities (such as virtually defect- free assembly methods or increased ability to speed new and improved products to market) that will be mutually beneficial in improving their competitiveness and business performance. If A and B's consolidated profits in the years to come prove no greater than what each could have earned on its own, then A's diversification won't provide its shareholders with added value. 50 Social, political, regulatory, and environmental factors 0.
Diversification Merits Strong Consideration Whenever A Single-Business Company Login
Industry B Business C in Industry C. Competitive Strength Measures. Diversification moves that can pass only one or two tests are suspect. Yes, a cash-rich and/or managerially adept corporate parent pursuing unrelated diversification can provide its subsidiaries with much-needed capital, valuable top-management guidance and advice, and capable administrative know-how, but otherwise it has little to offer in enhancing the competitive strength of its individual business units. Screening acquisition candidates and evaluating the pros and cons or keeping or divesting existing businesses.
A. will make the company better off because it will produce a greater number of core competencies. D. the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, or transfer skills or technology or intellectual capital from one business to another. C. understanding the true value of strategic investment proposals by business-unit managers. Moves to improve a diversified company's overall performance include. C. shareholders will view the contemplated diversification move as attractive. Whether to pursue a competitive advantage based on low-costs, differentiation or more value for the money. Which one of the following is not a rationale for retaining a cash hog business in a diversified company's portfolio? Businesses with ratings below 3. Chapter 8 • Diversification Strategies 175. n Exploiting use of a well-known and potent brand name. D. offers potential for the company's existing businesses and new businesses to perform better together under a single corporate umbrella. Some diversified companies are narrowly diversified around a few (two to five) related or unrelated businesses. When calculating industry attractiveness scores, to produce a valid response it is necessary to.
E. the difficulties of achieving economies of scope and conflicts/incompatibility among the competitive strategies of the company's different businesses. E. generally offers more competitive advantage potential than related diversification. E. All of the above. E. the firm has not built up a hoard of cash with which to finance a diversification effort. Unlike a related diversification strategy, there are no cross-business strategic fits to draw on for reducing costs, transferring beneficial skills and technology, leveraging use of a powerful brand name, or collaborating to build mutually beneficial competitive capabilities and thereby adding to any competitive advantage the individual businesses.