STARTEGIC MANAGEMENT (PSM 611) CORPORATE LEVEL STRATEGY

GROUP 8 (Eight) DARE OLUBUKOLA OLATUNDE KAREN JEAN THOMAS ANGORKOR OSA-KWAO SAIKOU SAMUSA BENJAMIN YELE WEHYE

WHAT IS CORPORATE STRATEGY?  Corporate Strategic is creating value across different businesses.  It is diversification.  When a firm chooses to diversify beyond a single industry and to operate businesses in several industries, where they are operationally related.

 Choosing and managing the mix of businesses.  It involves moves made to establish business positions in different industries and the approaches used to manage the company’s group of businesses.

WHY IS CORPORATE STRATEGIC IMPORTANT?  It specifies actions the firm takes to gain a competitive advantage.  It enhances a firms survival and Success, as it deals with:  Scope: How broad to make the portfolio.

 Corporate Parenting: How should the “Parent” add Value.  Portfolio Matrices: which SBU’s to invest in. (Johnson; Whittington & Scholes; 2011)

ANSOFF’S GROWTH STRATEGY Products Existing New A MARKET PENETRATION B NEW PRODUCTS AND SERVICES C MARKET DEVELOPMENT D DIVERSIFICATION

ANSOFF’S GROWTH MATRIX Was published in his article “strategies for Diversification” in Harvard Business Review With the Matrix companies can decide what course of action they can pursue, considering there performance.

The matrix four strategies  Market Penetration : existing markets and existing products. It is when a company penetrates a market with current products.  This can be achieved through advertising or other promotions.

 Product development: existing markets and new products. Is where organizations deliver modified or new products to existing markets.

 MARKET DEVELOPMENT: New markets and existing products. It involves the sale of existing products to new markets.

 Diversification: New markets, New products. The organizations goes beyond both its existing market and its existing products. It enters a new zone.

LEVELS OF DIVERSIFICATION Related Diversification: The same market, the same product.  Product development.  Link between its business units. Examples Units may share products or services, technologies or distribution channels.

Unrelated Diversification: Absence of direct link between its business units. Examples: Samsung acquiring Unilever.

REASONS FOR DIVERSIFICATION  Value(s) create increase revenue  There is reduction of cost  It allows spreading of risk  Gaining of market power relative to competitors through vertical integration.

DRIVERS FOR DIVERSIFICATION Exploiting economies of scope Efficiency achieved through applying the organizations existing resources or competences to new markets or services.

Stretching corporate management competences  The set of corporate-level managerial competences applied across the portfolio businesses.

Exploiting superior internal processes  Making use of internal processes within a diversified corporation, instead of the external processes in the open market.

Increasing Market Power  Diversification in many businesses increases the market power of a firm.  Can be attained from greater or pooled negotiating power and from vertical integration.

MEANS OF DIVERSIFICATION  Mergers and Acquisitions  Collaborative strategies  Internal development.

REFERENCES  Adams, S., Strategic Management. Accra: Gimpa.  Johnson, G., Whittington, R. & Scholes, K., Exploring Strategy. 9th ed. Essex: Prentice Hall.