CORPORATE-LEVEL STRATEGY

THREE KEY ISSUES FACING THE CORPORATION« ‡ THE FIRM¶S ORIENTATION TOWARD GROWTH, STABILITY, AND RETRENCHMENT (Directional Strategy) ‡ THE INDUSTRIES OR MARKETS IN WHICH THE FIRM COMPETES (Portfolio Strategy) ‡ THE MANNER IN WHICH MANAGEMENT COORDINATES ACTIVITIES AND TRANSFERS RESOURCES AND CULTIVATES CAPABILITIES AMONG PRODUCT LINES AND BUSINESS UNITS (Parenting Strategy) Corporate headquarters must play the ³parent´ as it deals with its various lines of business (children).

CORPORATE GROWTH STRATEGIES
CONCENTRATION 1. HORIZONTAL INTEGRATION
‡ ‡ GEOGRAPHIC EXPANSION
± Local, Regional, National, Global

INCREASING THE RANGE OF PRODUCTS and/or SERVICES

2.
‡

VERTICAL INTEGRATION
BACKWARD
Long-Term Contracts Quasi-integration Tapered Integration Full Integration

‡

FORWARD

DIVERSIFICATION 1. CONCENTRIC
Related

2.

CONGLOMERATE
Unrelated

GROWTH-ENTRY STRATEGIES
DOMESTIC ENTRY INTERNAL DEVELOPMENT & EXPANSION EXTERNAL ACQUISITIONS & MERGERS STRATEGIC ALLIANCES & PARTNERSHIPS Licensing, Franchises, Joint Ventures INTERNATIONAL ENTRY
EXPORTING LICENSING FRANCHISING JOINT VENTURES ACQUISITIONS GREEN-FIELD DEVELOPMENT PRODUCTION SHARING TURNKEY OPERATIONS MANAGEMENT CONTRACTS

WHEN ARE GROWTH STRATEGIES LOGICAL? COMPETITIVE POSITION WEAK RAPID REFORMULATE HORIZ & VERTICAL INTEGRATION DIVERSIFICATION SELL-OUT/DIVEST STRONG HORIZONTAL INTEGRATION VERTICAL INTEGRATION CONCENTRIC DIVERSIFICATION INTERNATIONAL EXPANSION DIVERSIFICATION ABANDONMENT SLOW JOINT VENTURE ----------------------------------------------------------------------------------- MARKET GROWTH RATE --------------------------------------------- DIVERSIFICATION CAPTIVE FIRM/MERGE .

WHEN IS DIVERSIFICATION LOGICAL? DON¶T DIVERSIFY UNLESS« SYNERGY IS ACHIEVED SHAREHOLDER VALUE IS BUILT CONCENTRIC DIVERSIFICATION FINDING A SYNERGISTIC ³FIT´ Marketing Operations Management MERGING THE FUNCTIONS CONGLOMERATE DIVERSIFICATION FIND FIRMS WHOSE ASSETS ARE UNDERVALUED FIND FIRMS THAT ARE FINANCIALLY DISTRESSED FIND FIRMS WITH BRIGHT PROSPECTS BUT ARE SHORT ON $$$ .

CONGLOMERATE (UNRELATED) DIVERSIFICATION PROS« 1--BUSINESS RISK IS SCATTERED OVER MANY INDUSTRIES 2--CAN INVEST CAPITAL IN WHATEVER OFFERS THE BEST PROFIT PROSPECTS 3--PROFITABILITY IS MORE STABLE BECAUSE HARD TIMES IN ONE INDUSTRY CAN BE PARTIALLY OFFSET BY GOOD TIMES IN ANOTHER 4--IF CORPORATE MANAGERS ARE GOOD AT SPOTTING BARGAIN-PRICED FIRMS WITH BIG UPSIDE PROFIT POTENTIAL. SHAREHOLDER WEALTH WILL BE ENHANCED CONS« 1--TOP MANAGEMENT COMPETENCE Can they tell a good acquisition from a bad one? Can they select good managers to run each business? Do they know what to do if a business unit stumbles? 2--DIVERSIFICATION DOES NOTHING TO ENHANCE THE COMPETITIVE STRENGTH OF INDIVIDUAL BUSINESS UNITS Each business unit is on it own No corporate synergy can be achieved 3--ARE THE FIRM¶S PROFITS MORE STABLE? Do the ³up and down´ cycles cancel out? 4--HOW MUCH DIVERSITY CAN THE FIRM MANAGE SUCCESSFULLY? How broad should our portfolio be? .

COMBINATION DIVERSIFICATION STRATEGIES ONE MAJOR CORE BUSINESS «With a modest diversified portfolio (1/3 or less) NARROWLY DIVERSIFIED «With a few (2-5) related core business units «With a few (2-5) unrelated business units BROADLY DIVERSIFIED «With many related business units «With many business units in mostly unrelated industries A MULTI-BUSINESS FIRM «With several unrelated groups of related businesses .

POST-DIVERSIFICATION STRATEGIES MAKE NEW ACQUISITIONS Related or Unrelated? DIVEST SOME BUSINESS UNITS Poor Performers? Poor Strategic ³Fit?´ RESTRUCTURE THE WHOLE PORTFOLIO NARROW THE DIVERSIFICATION BASE BECOME A DIVERSIFIED MULTINATIONAL. MULTI-INDUSTRY COMPANY (DMNC) .

but don¶t feed it´ Artificially supporting profits by cutting costs Keeping up appearances that everything is still OK A temporary strategy for a worsening environment PAUSE Consolidate after recent rapid growth A temporary strategy to ³catch your breath´ PROCEED WITH CAUTION Environment looks scary«wait to see what happens NO-CHANGE A very predictable environment«nothing uncertain ever happens Why tamper with success? What firms did before WalMart came« .CORPORATE STABILITY STRATEGIES PROFIT ³Keep milking the cow.

CORPORATE RETRENCHMENT STRATEGIES OFTEN TRIGGERED BY« DISAPPOINTING PERFORMANCE ECONOMIC DOWNTURN EXCESSIVE DEBT ILL-CHOSEN ACQUISITIONS TURNAROUND Help subsidiaries become profitable Belt-tightening and consolidation CAPTIVE COMPANY Give up independence for security«sell mostly to one large customer ³angel´ Can scale back on some functions. like marketing SELL-OUT/DIVEST Sell the entire operation to someone as an ongoing business Divest a healthy firm that doesn¶t fit our portfolio«or a low-producing business LIQUIDATION The last resort«no one wants to buy the entire business The assets are worth more than the business«so they¶re sold piece by piece .

EVALUATING DIVERSIFIED PORTFOLIOS THE BCG GROWTH-SHARE MATRIX (Boston Consulting Group) DIMENSIONS Industry Growth Rate Compared to GDP Relative Market Share Uses ratios instead of absolute market shares CLASSIFICATIONS Question Marks (or Problem Children or Wildcats) Stars Cows Dogs ADVANTAGES & IMPLICATIONS It is quantifiable and easy to use Easy to remember terms and their meaning when referring to business units Assumes large market shares => economies of scale => cost leadership Each business unit moves across the matrix in predictable ways over time Focuses attention on cash flows and needs .

STARS & COWS«VERY BIASED TERMS THE TRENDS & MOVEMENTS OF THESE UNITS SEEM MORE IMPORTANT IS HIGH INDUSTRY GROWTH ALWAYS GOOD? DOES HIGH MARKET SHARE ALWAYS MEAN HIGH PROFITABILITY? FIRMS CAN LOSE MONEY WHILE HOLDING A LARGE MARKET SHARE LOW-SHARE BUSINESSES CAN ALSO BE PROFITABLE ONLY CONSIDERS RELATIONSHIP TO THE MARKET LEADER²WHILE OTHERS ARE IGNORED WHAT ABOUT SMALL COMPETITORS WITH FAST-GROWING MARKET SHARES? GROWTH RATE IS ONLY ONE ASPECT OF INDUSTRY ATTRACTIVENESS MARKET SHARE IS ONLY ONE ASPECT OF OVERALL COMPETITIVE POSITION .WEAKNESSES IN THE BCG GROWTH-SHARE MATRIX TOO SIMPLISTIC²IT ONLY HAS A FOUR-CELL MATRIX WHERE DO ³AVERAGE´ BUSINESSES BELONG? PREJUDICIAL CLASSIFICATION SCHEME DOGS & PROBLEM CHILDREN v.

0 --------------------------------------------- COWS LOW DOGS --------------------------------------------- RELATIVE MARKET SHARE Your market share divided by largest rival¶s share INDUSTRY GROWTH RATE Industry growth percentage compared to GDP SIZE OF CIRCLES The significance (revenues) of each SBU to the firm .0 LOW --------------------------------------------- HIGH STARS QUESTION MARKS INDUSTRY GROWTH RATE 1.THE BCG GROWTH-SHARE MATRIX RELATIVE MARKET SHARE HIGH 1.

ENVIRONMENTAL.THE GE BUSINESS SCREEN THE INDUSTRY ATTRACTIVENESS / BUSINESS STRENGTH MATRIX TWO DIMENSIONS (McKinsey & Co) Industry Attractiveness MARKET SIZE & GROWTH RATE INDUSTRY PROFITABILITY INTENSITY OF COMPETITION BARRIERS TO ENTRY / EXIT SEASONALITY / CYCLICALITY TECHNOLOGICAL & PRODUCT CONSIDERATIONS CAPITAL REQUIREMENTS EMERGING OPPORTUNITIES & THREATS SOCIAL. & SERVICE v. RIVALS PROFIT MARGINS and COST POSITION v. RIVALS KNOWLEDGE OF CUSTOMERS & MARKETS TECHNOLOGICAL CAPABILITY & LEADERSHIP FINANCIAL & PHYSICAL RESOURCES CALIBER OF MANAGEMENT & STAFF COMPETENCIES MATCH KEY SUCCESS FACTORS . QUALITY. & POLITICAL FACTORS STRATEGIC FIT WITH OTHER CURRENT LINES OF BUSINESS Business Strength / (Competitive Position) RELATIVE MARKET SHARE RELATIVE PRICE.

THE GE BUSINESS SCREEN BUSINESS STRENGTH / COMPETITIVE POSITION STRONG HIGH AVERAGE WEAK ---------------------------------------- WINNER WINNER QUESTION MARK LOSER LONG-TERM INDUSTRY AVERAGE ---------------------------------------- WINNER ATTRACTIVENESS AVERAGE BUSINESS LOSER ---------------------------------------LOW PROFIT PRODUCER LOSER ---------------------------------------INDIVIDUAL PRODUCT LINES Identified by letter SIZE OF EACH CIRCLE Represents the total revenues in the industry PIE SLICES Represents your share of that market .

OR ADJUSTED DEPENDING ON THE INDUSTRY UNDER INVESTIGATION? .PROS & CONS OF THE GE BUSINESS SCREEN STRENGTHS USES MORE COMPREHENSIVE MEASURES / VARIABLES IN ASSESSING INDUSTRY ATTRACTIVENESS AND BUSINESS STRENGTH / COMPETITIVE POSITION DOESN¶T LEAD TO AS SIMPLISTIC CONCLUSIONS AS THE BCG GRID NINE CELL APPROACH ALLOWS FOR INTERMEDIATE RANKINGS BETWEEN HIGH/LOW AND STRONG/WEAK STRESSES CHANNELING OF RESOURCES TO AREAS WITH THE GREATEST PROBABILITY OF ACHIEVING COMPETITIVE ADVANTAGE AND SUPERIOR PERFORMANCE WEAKNESSES PROVIDES NO REAL GUIDANCE ON THE SPECIFICS OF WHAT STRATEGY TO FOLLOW « IT¶S TOO GENERAL CAN¶T SPOT UNITS THAT ARE ABOUT TO BECOME WINNERS BECAUSE THEIR INDUSTRIES ARE ENTERING THE TAKEOFF STAGE USE OF NUMERIC ESTIMATES SEEMS OBJECTIVE. BUT IS REALLY VERY SUBJECTIVE SHOULD THE WEIGHTS & FACTORS USED TO ASSESS INDUSTRY ATTRACTIVENESS AND BUSINESS POSITION BE USED GENERICALLY.

D.THE HOFER LIFE-CYCLE MARKET EVOLUTION MATRIX TWO DIMENSIONS EARLY DEVELOPMENT RAPID GROWTH / TAKE-OFF SHAKE-OUT MATURITY / SATURATION DECLINE / STAGNATION (Charles Hofer & A. Little. Co) Stage of Industry / Market Evolution Business Strength / (Competitive Position) SAME DIMENSIONS AS USED IN THE GE BUSINESS SCREEN ADVANTAGES Can be used to identify and track developing winners Illustrates how the firm¶s businesses are distributed across the stages of industry evolution .

THE HOFER LIFE-CYCLE MARKET EVOLUTION MATRIX BUSINESS STRENGTH / COMPETITIVE POSITION STRONG EARLY DEVELOPMENT -----------------------------AVERAGE WEAK ------------------------------ STAGE OF INDUSTRY / MARKET RAPID GROWTH / TAKE-OFF -----------------------------SHAKE-OUT EVOLUTION -----------------------------MATURITY / SATURATION -----------------------------DECLINE / STAGNATION -----------------------------ONLY ONE DIMENSION IS DIFFERENT FROM THE GE BUSINESS SCREEN Except for the Stage of Market Evolution. this model is identical to the GE Business Screen .

IN SUMMARY: USING PORTFOLIO ANALYSIS PROS AND CONS STRENGTHS ENCOURAGES TOP MANAGEMENT TO EVALUATE EACH LINE OF BUSINESS SEPARATELY. IT STIMULATES THE USE OF EXTERNALLY-ORIENTED DATA TO SUPPLEMENT MANAGEMENT¶S JUDGMENT RAISES THE ISSUE OF CASH FLOW AVAILABILITY FOR USE IN EXPANSION AND GROWTH GRAPHICALLY COMMUNICATES THE MIX OF BUSINESSES THE FIRM HAS INVESTED IN WEAKNESSES DEFINING PRODUCT / MARKET SEGMENTS IS DIFFICULT IT SUGGESTS STANDARD STRATEGIES THAT CAN MISS OPPORTUNITIES OR BE IMPRACTICAL PROVIDES AN ILLUSION OF SCIENTIFIC RIGOR. dog) LEAD TO SIMPLISTIC STRATEGIES AND SELF-FULFILLING PROPHESIES ITS NOT ALWAYS CLEAR WHAT MAKES AN INDUSTRY ATTRACTIVE OR WHERE A PRODUCT IS IN ITS LIFE CYCLE NAIVELY FOLLOWING PORTFOLIO PRESCRIPTIONS MAY REDUCE PROFITS ±DOGS CAN MAKE MONEY! . WHEN POSITIONS ARE REALLY BASED ON SUBJECTIVE JUDGMENTS VALUE-LADEN TERMS (cow. AND TO SET OBJECTIVES AND ALLOCATE RESOURCES TO EACH.

HOW TO APPLY PORTFOLIOS IN YOUR ANALYSIS THE NON-QUANTITATIVE APPROACH COMPARING INDUSTRY ATTRACTIVENESS ATTRACTIVENESS OF EACH INDUSTRY IN THE PORTFOLIO Is this a good industry for our organization to be in? EACH INDUSTRY¶S ATTRACTIVENESS RELATIVE TO THE OTHERS Which industries are the most / least attractive? ATTRACTIVENRSS OF ALL THE INDUSTRIES AS A GROUP How appealing is the mix of industries? Is the portfolio a ³good´ one? TO DETERMINE INDUSTRY ATTRACTIVENESS 1--USE GE BUSINESS SCREEN METHODOLOGY 2--SUBJECTIVELY CLASSIFY EACH INDUSTRY FACTOR INTO ONE OF THREE CATEGORIES« HIGHLY ATTRACTIVE AVERAGE NOT ATTRACTIVE .

& POLITICAL FACTORS STRATEGIC FIT WITH OTHER CURRENT LINES OF BUSINESS CLASSIFIED AS AVERAGE ATTRACTIVE UNATTRACTIVE UNATTRACTIVE AVERAGE AVERAGE UNATTRACTIVE AVERAGE AVERAGE ATTRACTIVE OVERALL EVALUATION = AVERAGE . REGULATORY.EVALUATING INDUSTRY ATTRACTIVENESS (UNWEIGHTED) INDUSTRY FACTOR MARKET SIZE & GROWTH RATE INDUSTRY PROFITABILITY INTENSITY OF COMPETITION BARRIERS TO ENTRY/EXIT SEASONALITY/CYCLICALITY TECHNOLOGY & PRODUCT CONSIDERATIONS CAPITAL REQUIREMENTS EMERGING OPPORTUNITIES & THREATS SOCIAL.

2. 1. 10 --------------------------------------------------------------INDUSTRY FACTOR ASSIGNED NUMBER MARKET SIZE & GROWTH RATE INDUSTRY PROFITABILITY INTENSITY OF COMPETITION BARRIERS TO ENTRY/EXIT SEASONALITY/CYCLICALITY TECHNOLOGY & PRODUCT CONSIDERATIONS CAPITAL REQUIREMENTS EMERGING OPPORTUNITIES & THREATS SOCIAL. 8.EVALUATING INDUSTRY ATTRACTIVENESS (NUMERIC. 5. UNWEIGHTED) ASSIGN A NUMBER TO EACH INDUSTRY FACTOR USING THE FOLLOWING SCHEME« UNATTRACTIVE = 0. 3 AVERAGE = 4. REGULATORY. 9.9 = AVERAGE . & POLITICAL FACTORS STRATEGIC FIT WITH OTHER LINES OF BUSINESS 6 9 2 3 6 5 1 5 4 8 OVERALL EVALUATION = 49/10 = 4. 6 ATTRACTIVE = 7.

WEIGHTED) 1--ASSIGN WEIGHTS TO EACH INDUSTRY FACTOR (Must add up to 100%) 2--THEN ASSIGN NUMBERS TO EACH FACTOR USING THE FOLLOWING SCHEME« UNATTRACTIVE = 0 . REGULATORY.15 .6 ATTRACTIVE = 7 .12 .3 AVERAGE = 4 .87 = AVERAGE .15 MARKET SIZE & GROWTH RATE INDUSTRY PROFITABILITY INTENSITY OF COMPETITION BARRIERS TO ENTRY/EXIT SEASONALITY/CYCLICALITY TECHNOLOGY & PRODUCT CONSIDERATIONS CAPITAL REQUIREMENTS EMERGING OPPORTUNITIES & THREATS SOCIAL.10 3--MULTIPLY WEIGHTS BY NUMBERS TO DETERMINE THE WEIGHTED SCORE -----------------------------------------------------------WEIGHT INDUSTRY FACTOR ASSIGNED NUMBER .10 . & POLITICAL FACTORS STRATEGIC FIT WITH OTHER LINES OF BUSINESS 6 9 2 3 6 5 1 5 4 8 OVERALL EVALUATION = 4.10 .05 .08 .10 .10 .EVALUATING INDUSTRY ATTRACTIVENESS (NUMERIC.05 .

RIVALS KNOWLEDGE OF CUSTOMERS & MARKETS TECHNOLOGICAL CAPABILITY / LEADERSHIP FINANCIAL & PHYSICAL RESOURCES CALIBER OF MANAGEMENT & STAFF COMPETENCIES MATCH KEY SUCCESS FACTORS STRONG AVERAGE AVERAGE STRONG STRONG AVERAGE WEAK AVERAGE STRONG AVERAGE OVERALL EVALUATION = AVERAGE to STRONG .EVALUATING BUSINESS STRENGTH / COMPETITIVE POSITION (UNWEIGHTED) USE THE FOLLOWING SCHEME TO CLASSIFY EACH BUSINESS STRENGTH FACTOR« STRONG AVERAGE WEAK --------------------------------------------------------------BUSINESS STRENGTH FACTOR CLASSIFIED AS OUR RELATIVE MARKET SHARE OUR RELATIVE PRICE v. RIVALS OUR QUALITY & SERVICE v. RIVALS OUR RELATIVE COST POSITION v. RIVALS OUR PROFIT MARGINS v.

RIVALS QUALITY & SERVICE v. RIVALS RELATIVE COST POSITION v. 8. RIVALS PROFIT MARGINS v.9 = AVERAGE . UNWEIGHTED) ASSIGN NUMBERS TO EACH BUSINESS STRENGTH FACTOR «USE THE FOLLOWING« WEAK = 0. RIVALS KNOWLEDGE OF CUSTOMERS & MARKETS TECHNOLOGICAL CAPABILITY & LEADERSHIP FINANCIAL & PHYSICAL RESOURCES CALIBER OF MANAGEMENT & STAFF COMPETENCIES MATCH KEY SUCCESS FACTORS 7 5 6 8 8 5 2 4 8 6 OVERALL EVALUATION = 59/10 = 5. 10 --------------------------------------------------------------ASSIGNED NUMBER INDUSTRY FACTOR RELATIVE MARKET SHARE RELATIVE PRICE v. 3 AVERAGE = 4. 1. 9. 2.EVALUATING COMPETITIVE BUSINESS STRENGTH (NUMERIC. 5. 6 STRONG = 7.

EVALUATING COMPETITIVE BUSINESS STRENGTH (NUMERIC.06 . WEIGHTED) 1--ASSIGN WEIGHTS TO EACH COMPETITIVE FACTOR (Must add up to 100%) 2--THEN ASSIGN NUMBERS TO EACH FACTOR USING THE FOLLOWING SCHEME« WEAK = (0 ± 3) AVERAGE = (4 ± 6) STRONG = (7 ± 10) 3--MULTIPLY WEIGHTS BY NUMBERS TO DETERMINE THE WEIGHTED SCORE -----------------------------------------------------------WEIGHT COMPETITIVE BUSINESS STRENGTH ASSIGNED NUMBER .05 . RIVALS PROFIT MARGINS v.06 .15 .08 . RIVALS KNOWLEDGE OF CUSTOMERS & MARKETS TECHNOLOGICAL CAPABILITY / LEADERSHIP FINANCIAL & PHYSICAL RESOURCES CALIBER OF MANAGEMENT & STAFF COMPETENCIES MATCH KEY SUCCESS FACTORS 7 5 6 8 8 5 2 4 8 6 OVERALL EVALUATION = 5.15 RELATIVE MARKET SHARE RELATIVE PRICE v. RIVALS RELATIVE COST POSTION v. RIVALS QUALITY & SERVICE v.93 = AVERAGE .12 .15 .10 .08 .

COMPARING BUSINESS UNIT PERFORMANCE WHICH BUSINESS UNITS HAVE THE BEST/WORST PERFORMANCE? ASSESS THE TRENDS RE: Sales Growth Profit Growth Contribution to Company Earnings Return on Capital Invested in the Business (ROA) Cash Flow Generated STRATEGIC FIT ANALYSIS STRATEGIC ATTRACTIVENESS Does this business have cost-sharing or skills-transfer opportunities? FINANCIAL ATTRACTIVENESS Does this business contribute to corporate performance objectives? RANK THE BUSINESS UNITS ON INVESTMENT PRIORITY Which units should get the highest priority regarding financial support? .

044 $237 .103 $ 29 .096 $342 STRATEGICALLY ATTRACTIVE FINANCIALLY ATTRACTIVE INVESTMENT PRIORITY No Yes 4 Yes Yes 1 Yes No 2 No Yes 3 .088 $ 28 .068 .124 $611 .062 $554 .018 .102 .071 .032 $ 70 .COMPARING BUSINESS UNIT PERFORMANCE A SIMPLE EXAMPLE UNIT A UNIT B UNIT C UNIT D SALES GROWTH GROWTH IN PROFITS CONTRIBUTION TO CORP EARNINGS (Omit 000s) RETURN ON ASSETS GENERATED CASH FLOWS (Omit 000s) .072 $234 .

8. 5. 3. 7. 4.CRAFTING A CORPORATE STRATEGY BY EVALUATING YOUR PORTFOLIO MATRIX 1. DOES THE PORTFOLIO HAVE ENOUGH BUSINESSES IN ATTRACTIVE INDUSTRIES? DOES THE PORTFOLIO CONTAIN TOO MANY MARGINAL BUSINESSES OR QUESTION MARKS? DOES THE CORPORATION HAVE ENOUGH CASH COWS TO FINANCE THE STARS AND EMERGING WINNERS? DO THE CORE BUSINESSES GENERATE DEPENDABLE PROFITS OR CASH FLOWS? IS THE PORTFOLIO VULNERABLE TO SEASONAL OR RECESSIONARY INFLUENCES? DOES THE PORTFOLIO CONTAIN BUSINESSES THAT THE CORPORATION DOESN¶T NEED TO BE IN? IS THE CORPORATION BURDENED WITH TOO MANY BUSINESSES IN AVERAGE-TO-WEAK COMPETITIVE POSITIONS? DOES THE MAKEUP OF THE PORTFOLIO PUT THE CORPORATION IN A GOOD POSITION FOR THE FUTURE? . 2. 6.

STEPS IN THE STRATEGIC ANALYSIS OF DIVERSIFIED FIRMS A SUMMARY 1. 7. 5. 6. IDENTIFY THE PRESENT CORPORATE STRATEGY CONSTRUCT BUSINESS PORTFOLIO MATRICES PROFILE THE INDUSTRY AND COMPETITIVE ENVIRONMENT OF EACH BUSINESS UNIT EVALUATE THE COMPETITIVE STRENGTH OF EACH INDIVIDUAL BUSINESS COMPARE PERFORMANCE RECORDS OF EACH BUSINESS UNIT HOW WELL DOES EACH BUSINESS UNIT ³FIT´ WITH CURRENT CORPORATE STRATEGY? RANK THE UNITS FROM HIGHEST TO LOWEST IN INVESTMENT PRIORITY CRAFT A SERIES OF MOVES TO IMPROVE OVERALL CORPORATE PERFORMANCE . 2. 3. 8. 4.

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