Corporate Strategy & Diversification

6 important questions on Corporate Strategy & Diversification

What is the Product/Market Growth Matix (Anshof)?

This is a model in which the market and product get combined in order to generate the basic direction of corporate strategy.

What are the basic directions for corporate strategy (Anshof)?


Diversification: increasing the range of products or markets served by an organization. Related diversification involves diversifying into products or services with relationships to the existing business, conglomerate diversification does not.Market penetration: implies increasing share of current markets with the current product range. Constraints: Retaliation from competitors/Legal constraintsProduct development: is where organizations deliver modified or new products/services to existing markets.Market development: involves offering existing products to new markets. It takes two basic forms:New users & New geographies.

What is the Parenting Matrix/Ashridge Portfolio Display?

Feel and benefit get combined 

  1. Heartland BU; which parent understands and continue to add value
  2. Ballast BU; which parent understands, but does not add value
  3. Value-trap BU; which parent does not understand, but gives value
  4. Alien BU; which is not understood by parent and does not give value
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What is the Directional Policy (GE-McKinsey) Matrix?

This combines the long-term market attractiveness and the SBU strength in order to offer guidelines given the position of the business unit.

For what are portfolio matrices used?

For managers to determine financial investment or divestment within their portfolios of business.

How is value-added to corporate patent?

  1. Envisioning (providing vision)
  2. Coaching/facilitating (to develop capabilities)
  3. Providing central services and resources
  4. Intervening (ensure performance, replacing weak personnel

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