《战略管理期末考试重点》课件.pptVIP

Industry Life-Cycle Life cycle of an industry refers to the stages of Introduction Growth Maturity Decline portrays how sales volume for a product or an entire industry changes over its lifetime. helps to understand the dynamic nature of strategy. Strategic Formulation Ch 6 Corporate-Level Strategy Diversification Related Diversification (P150) Potential limitations with MA(P165) Organizational Fit Vertical integration Horizontal Integration Diversification Diversification strategy describes the scope of the firm in terms of the industries and markets in which it competes. Related Diversification Unrelated Diversification Business 2 Business 1 Related Diversification Related businesses Businesses are related if they share a common market, technology, raw material, or any one of other primary activities. Production facilities Distribution channels Specialized skills Manufacturing facilities Technology development Unrelated Diversification Unrelated businesses Value creation derives from corporate office Leveraging support activities Business 2 Business 1 Procurement Information systems Human resource mgmt Firm infrastructure How to achieve diversification? Mergers and acquisitions Strategic alliances Joint ventures Internal development Potential limitations with MA The expensive premiums frequently paid by acquiring firms Performance difficulties Difficulties relate to integration Manager’s egos Cultural issues Organizational fit When two organizations or business units are merged or acquisition happened, and the organizational management processes, cultures, system, and structures are matching(similar), this is organizational fit. Vertical Integration: Benefits and Risks A secure source of raw materials or distribution channels. Protection of and control over valuable assets. Access to new business opportunities Simplified procurement and administrative procedures. Benefits Exhibit 6.3 Benefits and Risks of Vertical Integration Risks Costs and expenses