Strategic directions and corporate-level strategy

10 important questions on Strategic directions and corporate-level strategy

What is the corporate parent?

Refers to the levels of management above that of the business units, and therefore without direct interaction with buyers and competitors

What is the Ansoff porduct/ market growth matric?

Provides a simple way of negerating four basic alternative directions for strategic development:
- Market penetration (+ consolidation)
- Product development
- Market development
- Diversification

Which to forms can take consolidation?

- Defending market share
- Downsizing or divestment
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What are the 3 froms of market development?

- New segements
- New users
- New geograpies

What are the reasons for diversification?

- Efficiency gains
- Stretching corporate parenting capabilities
- Increasing market power
- Responsing to market decline
- Spreading risks
- The expectations of powerfull stakeholders

What is vertical intergration?

Is backward or forward intergration into adjacent activties in the value network

What is horizontal intergration?

Is development into activities which are complementary to the current activities

Why can related diversification be problemetic?

- Corporate level tima and costs
- Business unit complexity

What are main value adding activities of corporate parents?

- Enivsioning
- Coaching an facilitation
- Providing central services and resources
- Intervening

What are main value destroying activities of corporate parents?

- Adding management costs
- Adding bureaucratic complexity
- Obscuring financial performance

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