Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, which one of the following is not one of the main strategy options that the company can pursue?
A. Stick closely with the existing business lineup and pursue the opportunities these businesses present. B. Broaden the company's business scope by making new acquisitions in new industries. C. Craft new initiatives to more strongly differentiate the various products/services in each of the company's businesses and thereby enhance the competitive power and reputation of the company's brand name. D. Restructure the company's business lineup and put a whole new face on the company's business makeup. E. Divest certain businesses and retrench to a narrower base of business operations.
Craft new initiatives to more strongly differentiate the various products/services in each of the company's businesses and thereby enhance the competitive power and reputation of the company's brand name
Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, the one that isn't one of the main strategy options that the company can pursue is crafting new initiatives to more strongly differentiate the various products or services in each of the company's businesses and thereby enhance the competitive power and reputation of the company's brand name.
This is because some strategies adjustment are needed and enhancing its competitive power isn't the right thing to do.
evaluating whether there is much competitive value to be gained from cross-business collaboration to create valuable new resources or capabilities that could drive significant gains in performance.
Related Diversification is a situation whereby a company expands its production line or markets bu producing a new product or in a case whereby a company has to penetrates a new market that is related to the business activity of the company.
It should be noted that the evaluation of the competitive value of cross-business strategic fits in a company pursuing related diversification does not involve evaluating whether there is much competitive value to be gained from cross-business collaboration to create valuable new resources or capabilities that could drive significant gains in performance
a) The relative ease of growing shareholder value by capturing cross-business financial synergies that will quickly drive the company's overall financial performance to higher levels.
The first option is not a benefit of entering/diversifying into an unrelated business because growing shareholder value in this way is not easy. Entering a totally unrelated business(like a product in another industry for example) to the business the company is currently in may very well diversify anD spread out the risks but isn't easily achievable in the sense that it is not easy to succeed since this is a new business that the company is venturing into and would have to work towards securing it's space in the market. Therefore growing shareholder value in this way won't be easy as shareholders may also retract
All the above options are correct.
Value chain match-ups give rise to competitive advantage if it allows sister companies to leverage economies of scale by sharing production resources to the end that costs are significantly reduced, skills and technology are transferred and information grows within the system.
If any sub-business within a diversified group is taking more resources than it is contributing, it should be evaluated for possible course correction, "tune-ups" and or turn around interventions.
When there is a poor match between the parent company and the newly acquired company, there is often the need to re-evaluate the decision. If it is possible to effect a turnaround, at the least cost possible, the parent company would most likely do that otherwise, it "disconnects the umbilical cord".
Finance is a critical factor with maintaining a diverse array of businesses. Ideally, each business should be responsible for it's financial health. However the collective financial health of each sub-business is also reflective of the ability to monitor the progress of each subsidiary an make good business calls.
D. selling businesses too late and at too low a price
A diversified company refers to a business organization whose product portfolio and businesses are diverse, dealing in different kinds of products, and operating different businesses.
For example, a company may deal in tobacco products and stationery products at the same time. Such companies are characterized by unrelated products and businesses.
A diversified company may follow strategies such as harvest, retrenchment, restructuring and divestment strategy for improvement of overall performance.
Selling loss making businesses at the right time to avoid further losses refers to divestment strategy. Selling loss making businesses too late and at too low a price points towards poor divestment strategy, as it would on the contrary deteriorate existing performance.
E. Shifting from a multi-country to a global strategy.
The process of diversification allows the firms to reap the competitive advantages as the benefits of the skills and transfers, low costs economies of scope. Cross boundaries used by the powerful brands and collaboration in the creation of stronger and competitive capabilities. A diversified firms thus look for a global strategy to spread its risks and establish its business and develop its main strategic alternatives. The diversified firms hence have ample market opportunities and thereby brain the scope of the business.
The correct answer is option D.
The ethical principles in business are not much different from the ethical principle in general. They are not separately based on some other special rules to judge business conduct. They are judged from the society's perspective of right and wrong.
There are two schools of ethical principles, namely, ethical universalism and ethical relativism. Universalism believe that the concept of right and wrong are universal. While, on the other hand, relativism school believes that they vary according to local customs.
Though universal ethical principles from different societies form a kind of informal contract that all individuals and organizations have to follow.
Failure to observe these principles not only corrode company's reputation but have also other adverse effects and costs involved.