Divestiture can be accomplished by. But more than CORE CONCEPT just checking for the presence of good strategic fits is required. In companies pursuing unrelated diversification, top executives spend much time and effort screening acquisition candidates and evaluating the pros and cons of keeping or divesting existing businesses, using such criteria as: n Whether the business can meet corporate targets for profitability and return on investment. Entry into new businesses can take any of three forms: acquisition, internal startup, or joint venture/strategic partnership. Which one of the following is not a reasonable option for deploying a diversified company's financial resources? C. Diversification merits strong consideration whenever a single-business company portal. management wants to lessen the company's vulnerability to seasonal or recessionary influences. To test whether a particular diversification move has good prospects for creating added shareholder value, corporate strategists should use the.
N The presence of cross-industry strategic fits. Pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage. D. Diversification merits strong consideration whenever a single-business company near me. Whether to form a strategic alliance with a pure dot-com enterprise. Which of the following is the best example of unrelated diversification? N Corporate managers definitely add shareholder value when they possess the skills and business acumen to do such a superior job of overseeing, guiding, and otherwise parenting the firm's business subsidiaries that the subsidiaries perform at a higher level than they would otherwise be able to do as a stand-alone enterprise (thus satisfying the better-off test). Or existing businesses.
E. anywhere along the respective value chains of related businesses; no one place is best. Management Theory Review: Corporate Diversification Strategy - Theory - Review Notes. Diversification Strategy Options. Diversification based narrowly in a few. Entry barriers for startup companies are likely to be high in attractive industries—if barriers were low, a rush of new entrants would soon erode the potential for high profitability. C. Moving first can result in a cost advantage over rivals.
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. The purpose of rating the competitive strength of each business is to gain a clear understanding of which businesses are strong contenders in their industries, which are weak contenders, and the underlying reasons for their strength or weakness. The next two sections explore the ins and outs of related and unrelated diversification. Low priority for resource allocation. E. the difficulties of achieving economies of scope and conflicts/incompatibility among the competitive strategies of the company's different businesses. In a one-business company, managers have to come up with a game plan for competing successfully in a single industry arena or a single line of business—the result is what was labeled as business strategy in Chapter 2. 6 The Chief Strategic and Financial Options for Allocating a Diversified Company's Financial Resources. The better-off test. Diversification merits strong consideration whenever a single-business company product page. C. Integrating forward or backward into the target industry. N Too many competitively weak businesses. Answer:c. Two big appeals of a brick-and-click strategy are. D. have a quantitative basis for rating them from strongest to weakest in contending for market leadership in their respective industries. Because every business tends to encounter rough sledding at some juncture, unrelated diversification is a somewhat risky strategy from a managerial perspective. D. each business unit produces sufficient cash flows over and above what is needed to build and maintain the business, thereby providing the parent company with enough cash to pay shareholders a generous and steadily increasing dividend.
One is sluggish growth and meager performance improvements that make the potential revenue and profit boost of a newly acquired business look attractive. The three tests for judging whether a particular diversification move can create value for shareholders are the. The competitive advantage potential that flows from the capture of strategic-fit benefits is what enables a company pursuing related diversification to achieve 1 + 1 = 3 financial performance and the hoped-for gains in shareholder value. Step 5: Ranking the Performance Prospects of Business Units and Assigning a Priority for Resource Allocation Once a diversified company's businesses are evaluated from the standpoints of industry attractiveness, competitive strength, strategic fit, and resource fit, the next step is to use this information to rank the performance prospects of the businesses from best to worst. Economies of scale are cost savings that accrue directly from a larger operation—for example, unit costs may be lower in a large plant than in a small plant, lower in a large distribution center than in a small one, and lower for large-volume purchases of components than for small-volume purchases. Are there potential competitive benefits from cross-business sharing of a corporate parent's umbrella brand name or corporate reputation? C. ranking the performance prospects of the various businesses from best to worst and determining the priorities for resource allocation. Step 1: Assessing Industry Attractiveness A principal consideration in evaluating a diversified company's business make-up and the caliber of its strategy is the attractiveness of the industries in which it has business operations. Restructure the company's business lineup. Providing individual businesses with administrative support services creates value by lowering companywide overhead costs and avoiding the inefficiencies of having each business handle its own administrative functions. A. is making money, whereas a cash hog business is losing money. N Other competitively valuable resources and capabilities.
D. identify bargain-priced companies with big upside potential and then turn around their operations quickly with the aid of the parent company's financial resources and managerial know-how. Are valuable competitive assets. The one factor that company executives need not worry about when their company is managing many diverse, unrelated firms is. To the extent that corporate parenting skills and other complementary parenting resources can actually deliver enough added value to individual businesses to yield a stream of dividends and capital gains for stockholders greater than a 1 + 1 = 2 outcome, a case can be made that unrelated diversification has truly enhanced shareholder value. Aside from cash flow considerations, two other factors should be considered when assessing whether a diversified company's businesses exhibit good financial fit: 1. B. generates cash flows that are too small to fully fund its operations and growth, and so must receive cash infusions from outside sources to cover working capital and investment requirements. D. strategic fit test, the industry attractiveness test, and the dividend effect test. If a diversified company's business units all have competitive strength scores above 5. E. All of the above. C. a company's costs to enter the target industry are so high that the potentials for good profitability and return on investment are eroded. C. Considering whether a company's costs to enter the target industry are low enough to preserve attractive profitability or so high that the potentials for good profitability and return on investment are eroded. Of course, this benefit of utilizing a diversified company's administrative resources and expertise to support the needs of its individual business is just as much available to corporations pursuing related diversification as to those pursuing unrelated diversification. Some companies depend on new acquisitions to drive a major portion of their growth in revenues and earnings, and thus are always on the acquisition trail.
In analyzing the Nine-Cell Industry Attractiveness-Competitive Strength Matrix, those businesses occupying the three cells in the lower right corner of the matrix. But in a diversified company, the strategy-making challenge involves assessing multiple industry environments and developing a set of business strategies, one for each industry arena (or line of business) in which the diversified company operates. Both types of acquisitions raise the chances that a corporation's entry into new unrelated businesses can pass the better-off test. But sometimes a business selected for divestiture has ample resource strengths to compete successfully on its own. When a corporation has a parenting advantage and when its executives are also uniquely skilled in identifying weak-performing companies where there are achievable opportunities to boost profits to appealingly high levels, then the corporation has credible prospects of pursuing an unrelated diversification strategy that can deliver 1 + 1 = 3 gains in long-term shareholder value. Businesses positioned in the three cells in the upper left portion of the attractiveness–strength matrix (like Business A) have both favorable industry attractiveness and competitive strength, and thus merit top priority in the corporate parent's resource allocation ranking. Provide individual businesses with administrative expertise and other corporate resources that lower companywide administrative and overhead costs and enhance the operating effectiveness of individual businesses. D. Whether to employ a forward integration strategy.
A business unit's relative market share is defined as the ratio of its market share to the market share held by the largest rival firm in the industry, with market share measured in unit volume, not dollars. Are the first to bell the cat in that area. D. diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses. Resource fit exists when (1) each company business has adequate access to the resources it needs to be competitively successful (these resources can either be internal to its own operations or supplied by its corporate parent) and (2) the parent company has sufficient financial resources and parenting capabilities to support its entire group of businesses without spreading itself too thin. Being able to eliminate or reduce costs by combining related value-chain activities of different businesses into a single operation. A. is aimed at achieving good financial fit (whereas related diversification aims at good strategic fit). This is why a company's relative market share is a better measure of competitive strength than a company's market share based on either dollars or unit volume. D. the businesses have several key suppliers in common. When calculating industry attractiveness scores, to produce a valid response it is necessary to. 7. n The company's financial resources can be employed to maximum advantage by (1) investing in whatever industries offer the best profit prospects (as opposed to considering only opportunities in industries with related value chain activities) and (2) diverting cash flows from company businesses with lower growth and profit prospects to acquiring and expanding businesses with higher growth and profit potentials. 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.
One, capturing cross-business strategic fits via a strategy of related diversification builds long-term economic value for shareholders in ways they cannot undertake by simply owning a portfolio of stocks of companies in different industries. All the organizations cannot. Market leaders in slow-growth industries often generate sizable positive cash flows over and above what is needed for growth and reinvestment because their industry-leading positions tend to give them the sales volumes and reputation to earn attractive profits and because the slow-growth nature of their industry often entails relatively modest annual investment requirements. D. paying down existing debt, increasing dividends, or repurchasing shares of the company's stock. A. will make the company better off because it will produce a greater number of core competencies. CORE CONCEPT A strategy of multinational diversification into related businesses has more builtin potential for competitive advantage than any other diversification strategy. C. Competitively valuable cross-business strategic fits are what enable related diversification to produce a 1 + 1 = 3 performance outcome. Diversification builds shareholder value when a diversified group of businesses can perform better under the auspices of a single corporate parent than they would as independent, stand-alone businesses—the goal is to achieve not just a 1 + 1 = 2 result but rather to realize important 1 + 1 = 3 performance benefits.
Sometimes divesting a business must be considered because market conditions in a once-attractive industry have badly deteriorated. B. the firm needs better access to economies of scope in order to be cost-competitive. C. discounts the importance of strategic fit and instead focuses on building and managing a group of businesses in attractive industries that can acquired on financial terms that allow for acceptable returns on investment. Procter & Gamble's acquisition of Gillette strengthened and extended P&G's reach into personal care and household products— Gillette's businesses included Oral-B toothbrushes, Gillette razors and razor blades, Duracell batteries, Braun shavers and small appliances (coffee makers, mixers, hair dryers, and electric toothbrushes), and toiletries (Right Guard, Foamy, Soft & Dry, White Rain, and Dry Idea). B. emerging opportunities and threats, the intensity of competition, and the degree of industry uncertainty and business risk. B. why cash cow businesses are more valuable than cash hog businesses. Last 30 days 282 views. B. has a clear path to achieving 1 + 1 = 3 synergy gains in shareholder value. Could cross-business collaboration to create new competitive capabilities lead to significant gains in performance? A fourth, and often important, motivating factor for adding new businesses is to complement and strengthen the market position and competitive capabilities of one or more of its present businesses.
Clue: Give the go-ahead. We found 3 solutions for Gave The Go Ahead top solutions is determined by popularity, ratings and frequency of searches. New York Times - Apr 5 2017. Some March In Tiny Armies. Washington Post - September 26, 2008. With you will find 3 solutions. More variety of challenging levels, find answers by looking at pictures, challenge your mind in a whole new way. Jonesin' - Apr 7 2020. New York Times most popular game called mini crossword is a brand-new online crossword that everyone should at least try it for once! New York times newspaper's website now includes various games containing Crossword, mini Crosswords, spelling bee, sudoku, etc., you can play part of them for free and to play the rest, you've to pay for subscribe. Possible Answers: OKED. The system can solve single or multiple word clues and can deal with many plurals.
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