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  • Presentation Lecture 10 Corporate Level Strategy Related and Unrelated Diversification

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    sadif sayeed
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    The document discusses different types of corporate-level strategies including horizontal integration, vertical integration, and diversification. It outlines the benefits and problems of horizontal integration such as cost reductions and cultural issues. Vertical integration benefits include specialized assets and quality control, while problems involve costs and technology changes. Diversification can increase profitability through synergies across businesses but also brings disadvantages like bureaucracy. Alternatives to vertical integration like outsourcing are also examined.

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    The document discusses different types of corporate-level strategies including horizontal integration, vertical integration, and diversification. It outlines the benefits and problems of horizontal integration such as cost reductions and cultural issues. Vertical integration benefits include specialized assets and quality control, while problems involve costs and technology changes. Diversification can increase profitability through synergies across businesses but also brings disadvantages like bureaucracy. Alternatives to vertical integration like outsourcing are also examined.

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    14 views6 pages

    Presentation Lecture 10 Corporate Level Strategy Related and Unrelated Diversification

    Uploaded by

    sadif sayeed
    The document discusses different types of corporate-level strategies including horizontal integration, vertical integration, and diversification. It outlines the benefits and problems of horizontal integration such as cost reductions and cultural issues. Vertical integration benefits include specialized assets and quality control, while problems involve costs and technology changes. Diversification can increase profitability through synergies across businesses but also brings disadvantages like bureaucracy. Alternatives to vertical integration like outsourcing are also examined.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 6

    Lecture Takeaways

    • Corporate-Level Strategy
    • Horizontal Integration (merger & acquisition)
    • Benefits of Horizontal integration (cost structure, product differentiation, product
    bundling, cross-selling, leveraging competitive advantage, industry rivalry, bargaining
    power)
    • Problems of Horizontal Integration (culture, employee turnover, antitrust authorities)
    • Vertical Integration
    • Benefits of Vertical Integration (specialized assets, holdup, tapered integration, product
    quality, scheduling)
    • Problems of Vertical Integration (cost structure, technological change)
    • Alternatives to Vertical Integration (bidding, strategic alliance, quasi-integration)
    • Strategic Outsourcing
    • Benefits of Strategic Outsourcing (cost structure, differentiation, core business)
    • Problems of Strategic Outsourcing (holdup, competition, information loss, learning
    opportunities)
    [Hill. 2013]

    Lecture 10
    Corporate-Level Strategy:
    Related and Unrelated Diversification
    Diversification
    • Diversification
    • Diversified Company
    • Related Diversification
    • Unrelated Diversification
    Increasing Profitability through Diversification
    • Transferring Competencies Across Businesses
    • Commonality
    • Sharing Resources and Capabilities
    • Product Bundling
    Disadvantages of Diversification

    • Changes in the Company

    • Bureaucratic Costs

    https://www.youtube.com/watch?v=U2FwbeLHNfA
    Lecture Takeaways

    • Diversification (related & unrelated)


    • Increasing Profitability through Diversification (transfer competencies
    across businesses, commonality, sharing resources and capabilities,
    product bundling)
    • Disadvantages of Diversification (company changes, bureaucratic costs)

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