Corporate Level Strategy Essay

686 Words Mar 27th, 2011 3 Pages
Diversification strategy is used to increase the firm’s value by improving its overall performance. Value here is created here either through related diversification ( my report) or through unrelated diversification ( which will be discussed further) when the strategy allows a company’s business to increase revenues or reduce cost while implementing their business –level strategies
In some case, using diversification strategy may have nothing to do with increasing the firm’s value; in fact it can have neutral effects or even reduce firm’s value. Value neutral reasons for diversification include those of a desire to match and thereby neutralize a competitor’s market power ( such as to
There are 2 ways diversification strategies can
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In addition, because they both produce consumer products, these two businesses are likely to share distribution channels and sales networks. Another example is Unilever- Clear Shampoo and Cream Silk
Advantage:
Disadvantage: Corporate Relatedness: Transferring of Core Competencies
Corporate level core competencies-are complex sets of resources and capabilities that link different businesses, primarily through managerial and technological knowledge, experience and expertise. The ability to successfully price new products in all of the firm’s businesses is an example of what research has shown to be value-creating, corporate level competence. Firms seeking to create value through corporate relatedness used the related linked. diversification strategy

Example: Virgin Group Ltd transfers its marketing core competencies across travel, cosmetics, music, drinks, mobile phones and even health clubs. Virgin Casino, Virgin Balloon Flights, Virgin Atlantic Airways, etc.
In the Philippines, the famous SM. With the acquisition of SM Group of Companies to banking, real estate, consumer goods, SMDC, BDO.
Virgin Group Limited is a British branded venture capital conglomerate organization founded by business tycoon Richard Branson.[2] The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company; however Virgin's business and trading activities date to

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