《工商管理专业MBALectureLectu5课件》由会员分享，可在线阅读，更多相关《工商管理专业MBALectureLectu5课件（18页珍藏版）》请在金锄头文库上搜索。
1、Corporate Level StrategyCorporate Level StrategyDr Ita ODonovanLecture Six工商管理专业MBALectureLectu(5)课件Key Considerations Key Considerations We are looking at the issue of corporate strategy from the perspective of what is the multi-business scope of the organisation.What is the optimal number of busin
2、esses for the firm Should we stay in this businessHow should our businesses be managedHow is the corporation going to operate as a whole2工商管理专业MBALectureLectu(5)课件The sources of superior profitability The sources of superior profitability RATE OFRETURNABOVE THE COST OF CAPITALHow do we make Money?IN
3、DUSTRY ATTRACTIVENESSWhich industries should we be in?CORPORATESTRATEGYCOMPETITIVEADVANTAGEHow should we compete?BUSINESS STRATEGY3工商管理专业MBALectureLectu(5)课件Strategies Strategies Diversification two broad types:Related diversification is development beyond the present product and market, but still w
4、ithin the broad confines of the industry. For Example Unilever is a diversified corporation, but virtually all its interests are in the consumer goods industry.(a) Backward integration refers to inputs into the current business further back in the value system e.g. Raw materials, machinery, labour(b
5、) Forward integration refers to activities which are concerned with the companys outputs e.g. Transport, distribution, repairs, and servicing. These are further forward in the value system(c) Horizontal integration refers to activities which are competitive with or directly complementary to a compan
6、ys present activitiesUnrelated diversification refers to activity development beyond the present industry into products/markets, which at face value, may bear no clear relationship with present products/markets. 4工商管理专业MBALectureLectu(5)课件Related developments; related and unrelated diversification5工
7、商管理专业MBALectureLectu(5)课件Some Reasons for related DiversificationSome Reasons for related DiversificationPossible advantagesPossible advantagesExamples /CommentsExamples /Comments1. Control of supplies1. Control of suppliesQuantityQuantityQualityQualityPricePriceTea Processors own plantations to sec
8、ure continuity of Tea Processors own plantations to secure continuity of Supply. Supply. Components for motor cars may need to be manufactured Components for motor cars may need to be manufactured by the companyby the companyPrinting facility can be cheaper in -housePrinting facility can be cheaper
9、in -house2. Control of markets2. Control of marketsUK shoe manufacturers own retail outlets to gain guaranteed UK shoe manufacturers own retail outlets to gain guaranteed distributiondistribution3. Access of information3. Access of informationManufacturers are involved in machinery development Manuf
10、acturers are involved in machinery development companies to keep abreast of developmentcompanies to keep abreast of development4. Cost savings4. Cost savingsFully integrated steel plants save cost on reheating and Fully integrated steel plants save cost on reheating and transporttransport5. 5.Buildi
11、ng on: ExpertiseBuilding on: ExpertiseTechnologyTechnologyAccountancy Firms moving into tax advice or corporate Accountancy Firms moving into tax advice or corporate recovery recovery Transfer to similar technical requirements in another fieldTransfer to similar technical requirements in another fie
12、ld6. Spreading Risk6. Spreading RiskAvoid overreliance on one product/market, but build on Avoid overreliance on one product/market, but build on related experiencerelated experience7. Resource Utilisation7. Resource UtilisationUnder-utilised manufacturer acquires company with Under-utilised manufac
13、turer acquires company with compatible products to fill capacitycompatible products to fill capacity6工商管理专业MBALectureLectu(5)课件Some reasons for unrelated diversificationSome reasons for unrelated diversificationPossible AdvantagesPossible AdvantagesExamples/CommentsExamples/Comments1.Need to use exc
14、ess cash or safeguard profitsBuying a tax loss situation2. Personal values or objectives of powerful figuresPersonal image locally or nationally may be a strong motive3.Exploiting underutilised resourcesFarmers use fields for camp sites, festivalsCompanies hire their conferences facilities4. Escape
15、from present businessA companys products may be in decline and unrelated diversification is the only escape5.Spreading riskSome companies believe it is good sense to have all their eggs in one basket.6. Even out cyclical effects in a given sectorToy manufacturers make a subcontract for plastic mould
16、 products for industry.7. Benefits from synergistic effectsPositive cash flow from one business used to funding requirements of another7工商管理专业MBALectureLectu(5)课件Strategies for DevelopmentStrategies for DevelopmentWithdrawal: this option needs to be considered by organisations when complete or parti
17、al withdrawal needs to be considered.Assets can change over time, may need to dispose, acquire others etc.Entrepreneur may have achieved goals wishes to move on acquire different things.Consolidation:In growing market, company expands with market to maintain share of marketIn mature market more diff
18、icult challenges, tendency is for emphasis on cost, quality of product or service. Competitors are all seeking to consolidate there positions工商管理专业MBALectureLectu(5)课件Strategies continuedConsolidationIn declining markets; need to consider significant changes e.g. Buying up the order books of those l
19、eaving the market, distributors may need to find new suppliers. New internal agreements to main competitive edge.During a transition form a mature to a declining market, they might consider harvesting i.e. gaining maximum pay off from strong position.e.g. Licensing of technology, or distribution rig
20、hts, or leasing facilities.Difficult decision whether to remain in market where there is product decline but chance of recovery工商管理专业MBALectureLectu(5)课件Strategies ContinuedStrategies ContinuedMarket Penetration: how easy this is depends on nature of the market and position of competitors. In genera
21、l easier in growing markets, than static markets or mature markets.Product development: a firm might think consolidation is not sufficient in itself. No special strategy for this but the following factors in firms have been shown to have influenced their success.They are more market focused in selec
22、ting opportunities for product development and in tailoring them to market needsThey concentrated on developing products which built on their core competences and skillsThe communicated the new products well within the firm thus avoiding disruptions to the new developmentsThey used cross-disciplinar
23、y teams, as well as skills and views form outside the firm, including suppliers and customers.10工商管理专业MBALectureLectu(5)课件Strategies ContinuedStrategies ContinuedMarket Development: in the case of market development the organisation maintains the security of its present products while venturing into
24、 new market areas.These may includeNew market segments; exploiting new uses of the product or new geographical areasOption of product development and market development together or separatelyExport driveOutsourcing to other countries for costs of labour, transport supplies.11工商管理专业MBALectureLectu(5)
25、课件Portfolio AnalysisPortfolio AnalysisMarket Power and Market Share are important concepts for a strategic business unit to consider. Relative market share means the amount of market share a firm has relative to it competitorsThere is an established relationship between market power and performance
26、in commercial organisations.Useful to break down market share by segments and to examine market share within those segmentsWhat is important is to see which market segments are important from corporate/profit point of view.Segment may be more competitive or growing more or bigger12工商管理专业MBALectureLe
27、ctu(5)课件Growth Share MatrixGrowth Share Matrix Market Share COMPETITIVE POSITION High Low Strong Average Weak High High Market Stars ?s Industry Growth Attractiveness Low Cash Dogs MED Cows Low The original Boston ConsultingGroup matrix (BCG)13工商管理专业MBALectureLectu(5)课件Growth Share Matrix continuedG
28、rowth Share Matrix continuedA star is an SBU which has a high market share in a growth market. The firm may be spending heavily to gain that share , but experience curve benefits should mean that costs are reducing over time and at faster rate than competitorsThe question mark is an SBU with high gr
29、ow but does not have a high market share. Firm could be spending heavily but not reducing costs and not making inroads on competitionThe Cash Cow has a high market share in a mature market.Low growth market conditions stable,need to spend is less. High relative market share means SBU able to maintai
30、n unit cost levels below competitors.Dogs have low share in static or declining markets, worst of all combinations, may drain cash and use disproportionate amount of time and resources.14工商管理专业MBALectureLectu(5)课件Market attractiveness and business Market attractiveness and business strengthstrengthI
31、ndicators of SBU StrengthIndicators of SBU StrengthIndicators of market attractivenessIndicators of market attractivenessMarket shareMarket sizeSales forceMarket growth rateMarketingCyclicalityCustomer serviceCompetitive structureR & DBarriers to entryManufacturingIndustry profitabilityDistributionT
32、echnologyFinancial resourcesInflationImageRegulationWorkforce availabilityBreadth of product lineSocial IssuesQuality/reliabilityEnvironmental issuesManagerial CompetencePolitical issuesLegal issues15工商管理专业MBALectureLectu(5)课件Issues to considerIssues to considerDifficulties of exactitude What exactl
33、y is the market position, what are the growth rates, what are the dominant positions.?What evidence are managers using to take decisions, are they indulging in over optimistic assessmentsDogs may be written off without sufficient consideration, withdrawal from a market can have consequences as well
34、as benefits.Power given to others who may be competitors in another market also.16工商管理专业MBALectureLectu(5)课件Exercise Lecture Six. Exercise Lecture Six. Essential Reading Chapter Six ; de Wit and Meyer. Please remember to read all the readings within this chapter.Individual Exercise to be handed and
35、signed.Use both the Market Attractiveness and Business Strength Matrix and the Growth Share Matrix, to undertake an analysis of the relative competitive position of either :Case Eleven: Nestles in 2008 or Case Twelve: Aditya Birla Group. In de Wit and Meyer Text Book17工商管理专业MBALectureLectu(5)课件工商管理专业MBALectureLectu(5)课件
